Property market rebound in November?
The residential property market “rebounded” in November after several quiet months, with higher sales and a median price of $352,000, according to the Real Estate Institute.
Tuesday, December 11th 2007, 4:29PM
by The Landlord
By Andrea Milner
After historically low sales volumes of 6854 in October, the lowest October sales since 2001, REINZ says its figures demonstrate the November market showed the expected spring buoyancy, with a lift in sales to 7837 for November.
The national median is up from the October figure of $350,000 and September’s $351,500. “The latest year-on-year national median price figures show the market is up 6.66% in the year to November, down from the 8.02% growth rate to October, which suggests that the market is levelling off at a very gentle rate more akin to a glider than a stone,” says REINZ president Murray Cleland.
However Westpac economist Donna Purdue says sales are up only 2.2% on a seasonally adjusted basis – down 21.6% from a year ago, so they are still “really weak - the lowest for a November month since 2000".
Purdue says the pick-up in the median house price was a “surprise” – Westpac economists were last week predicting the November house sales data would remain “grim” – but she says it is up only 6.7% on a year ago. This is half the rate of house price growth compared with the May 2007 figure of 14.8%.
As well, she says days to sell have blown out to the most number of days since March 2002 when they hit 43.
Cleland acknowledges days to sell have lengthened from 34 nationally to 36, and vendors, buyers and agents have to work harder to reach an agreed value.
ASB chief economist Nick Tuffley says the $2000 median price rise since October is noticeably flatter than the annual growth trend for the last few years, as is sales turnover.
He says “warning signs”, such as buyers being more circumspect, are still apparent. When sales for November 2006 are compared with the 2007 figures, he says there is a noticeable “dropping away” in the under $400,000 bracket, suggesting investors and first homebuyers are feeling the pinch.
“It’s not all doom and gloom, but the balance is swinging so that turnover will remain subdued and prices stay flat.”
Regional commentary
Of the 12 real estate regions in New Zealand, there were six rises and five falls, with one region, Otago, experiencing an unchanged median.
Northland saw a decreased median sales price from $310,000 in October to $307,500 in November.
The Auckland regional median price was up from $445,000 in October to $450,000 in November, supported mainly by the Auckland metropolitan median, which increased from $445,000 to $453,000 on an increase in sales from 1995 to 2140. Auckland city sales, part of the Auckland metropolitan area, were up from 778 to 837, with the median up from $479,000 to $487,000.
Waikato and the Bay of Plenty region saw its median ease back from $329,000 to $322,750. Hawkes Bay increased its median from $262,000 to $275,000.
Manawatu and Wanganui eased back from $233,250 to $228,000, while Taranaki recovered well with a median increase from $262,250 to $275,000.
Wellington performed strongly with an increase from $365,000 to $395,000, while the Nelson/Marlborough median slipped from $347,000 to $333,000.
Canterbury/Westland region saw its median up from $310,000 to $314,000 but Central Otago Lakes continued to be dominated by variations in transactions sizes. This month the median was down from $545,000 in October, to $430,000, mainly due to a drop in higher priced property sales in Queenstown.
Otago was unchanged at $235,000 while Southland quickly recovered from its October drop to achieve a median rise from $186,000 in October to $209,025, restoring it to the number one ranking in the annual percentage increases around the regions, with a figure of 34.85%.
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