Confidence returning to residental housing market: Survey

Residential real estate is selling quickly, although there’s a shortage of listings, according to the latest BNZ Confidence Survey.

Tuesday, May 12th 2009, 12:00AM

by The Landlord

Real estate agents say conditions have improved since the previous survey, with a lot of interest from buyers, although sellers were still wary of the market.

Commercial real estate struggled to attract tenants, but found improved investor interest, according to the survey.

Across all sectors, there was a marked increase in sentiment, with a net 27% of 18,000 respondents expecting the economy to improve in the next 12 months, compared to 0% in the April survey.

“Things have been constantly improving in the residential investment property sector,” wrote one respondent in the survey’s comments.

Residential property values fell 9.2% in the 12 months to April 30, a slight improvement on 9.3% decline recorded in the year to March 31, according to QV Valuations.

Last week, Barfoot & Thompson, Auckland’s biggest real estate agency, found the city’s property prices rose 2.2% in April.

The Real Estate Institute of New Zealand will release its figures later this week after reporting home sales rose 31% to 6,694 in March from the previous month.

The three organisations noted anecdotally that there were signs the real estate market was on the up, and QV spokesman Blue Hancock said price stabilisation suggested the house prices may be near the bottom in this cycle.

Helping boost sentiment is the fact that Reserve Bank Governor Alan Bollard last month slashed the official cash rate to a record low 2.5% and said rates would stay low until the second half of 2010. Bollard’s comments have been seen as directed at longer-term fixed mortgage rates that have failed to abate in the face of a very low OCR.

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