Residential property sales in New Zealand have fallen to their second lowest volume in a June month in the past decade as the property market struggles, according to the latest figures to be published.
Data from the Real Estate Institute shows that total residential sales fell to 4,575 last month from 5,206 in May, and 6,040 in June last year. It is only the second time in the past 10 years that a June month has recorded fewer than 5,000 sales, the first being in 2008.
The median number of days it takes to sell a property rose to 45 from 43 in May and 41 days in the same month a year earlier, and is 15 days longer than when the property boom peaked in 2007, the data also shows.
In addition the latest real estate price figures from valuations company QV shows that values fell for a second month in a row in June and are not 4.7% below their peak at the end of 2007.
Its monthly report on residential property showed that nationwide values are 5.2% above the level of a year ago, but that is down from a 5.6% increase in May, which was the first annual decline in prices since March 2009.
The data shows that prices in June were 4.3% below the market peak of late 2007, having been 4.1% lower in May and 3.9% lower in April. But the average sales price has increased slightly from $403,070 to $404,715.
In the Auckland area prices are 7.9% above last year, down from the 8.8% reported in May. The increase in the Wellington area slipped to 5.4% in June from 6% the previous month and in Christchurch it dropped to 5.9% from 6.2%, the data shows.
In some provincial areas values are lower than they were a year ago with Whangarei down 1.1%, Rotorua down 2.1%, and Gisborne down 0.9%.
Glenda Whitehead of QV Valuations said no evidence yet that tax changes in May’s budget are having a dramatic impact on the property market. Any impact is likely to take effect during the next 12 months as various tax changes as implemented and will depend on whether investors decided to sell as a result of the budget measures.
At present sellers with unrealistic price expectations were being bypassed by purchasers according to Whitehead. ‘Buyers continue to be very cautious and selective in their purchasing decisions. Properties with perceived flaws such as structural problems, or poor maintenance, or perhaps at a greater distance from town, are proving harder to sell,’ she explained.
Distressed sales continued to have an impact, bringing down price levels in areas where they were available and potentially cheaper than non-stressed sales. Sales numbers were around 20% below the long-term average, with a decline in activity typical for this time of the year as winter sets in, she said.
‘There also appears to have been an easing in the number of new properties coming on to the market, which is a normal trend for this time of the year. There is still plenty of choice for the few buyers actively searching,’ she added.
There is unlikely to be a steep fall in prices though, according to Philip Borkin, economist at Goldman Sachs JBWere. ‘We do not envisage a sharp fall in house prices. Given the stickiness of the market, this would require a marked increase in distressed sales and we only place a small probability on this,’ he said.