Residential property markets in New Zealand are continuing downwards with one index showing sales reaching a record low in January and experts predicting a slow 2011.
The latest figures from the Real Estate Institute of New Zealand show that there were just 3,252 sales in January, lower than the previous low of 3,666 in January 2010 as fewer houses than ever before came on to market.
This followed on from weak sales in December 2010 at 4,397 in December. And it is taking longer to sell a property with the median time to sell a house increasing to 51 days last month, that’s eight more days than January 2010, and 12 more days than in December.
‘The traditionally subdued month of January was marked by the lowest ever level of new listings coming to market and turnover fell to a new low below that of January 2010. This reflects that with rental shortages in key urban areas such as Auckland and relatively low interest rates, home owners and investors alike are under no pressure to sell,’ said REINZ chief executive Helen O’Sullivan.
‘Low levels of building consents don’t suggest any significant increase in new housing stock in the short term. This in turn should provide support for prices over the coming 12 months,’ she added.
Property prices fell 2.6%, according to the Reserve Bank-devised REINZ Monthly Housing Price Index, and were down 0.1% in the three months to the end of January. It means that on an annual basis prices were down 2.6%.
The median Auckland house sale price fell to $450,000 last month from $455,000 in December, with 1,115 sales compared to 1,428 a month earlier. Wellington prices dropped to $370,000 from $400,000 in December, and sales declined to 377 from 586.
Christchurch sales prices declined to $328,200 from $330,500 in December, as sales numbers dropped to 458 from 637. Dunedin prices dropped to $205,500 from $235,000, with sales falling to 138 from 231 in December.
The latest QV data shows property values were 1.5% lower in January than the same month a year ago. The figures from the government values also shows that median sale prices fell 2.9% to $340,000 compared to January 2010, and was down 3.4% from December.
Research director Jonno Ingerson said there are considerable variations in the market depending on location. Values across the combined main centres have been stabilising, while across combined provincial and rural areas values have continued to slide.”
Of New Zealand’s three main urban areas, Christchurch was the only centre to record any growth in January, with demand for housing undamaged by the Sept. 4 earthquake helping to lift prices 0.3% higher when compared to the same month last year.
In January, Auckland’s values were stable, down 0.6% on 2010 levels, while in Wellington values have been rising since October after declining steadily in the six months prior, and are now 2.5% below last year.
The remaining centres all declined in January as economic uncertainty and lack of confidence sap demand, with values in Hamilton down 3.4% on the same month last year, Dunedin values down 3.7%, and Tauranga down 2.2%.
The data continues last year’s trend of a softer property market as households continue to use the low interest rate environment to repay debt rather than increase spending.