The residential real estate market in New Zealand is stuck in neutral with the number of properties sold falling to a 10 year low, a new report shows.
The latest house price index from the Real Estate Institute of New Zealand shows prices fell 1.2% in July from June. It means prices are now just 1.8% higher than they were a year ago.
It also shows though that there has been a dramatic fall in the number of people buying property. Nationwide sales slipped from 4,575 transactions in June to 4,411 last months its lowest July total in 10 years.
Auckland was the only major location to see an increase in prices from June, up $5000 to $450,000. Prices were down from $405,000 to $385,000 in Wellington and in Christchurch city the median residential property price fell from $340,000 to $328,250 during the same period, the report shows.
Prices also fell in the Central Otago Lakes region, Canterbury/Westland, Waikato Bay of Plenty, Hawkes Bay and Nelson/Marlborough, but were up in Otago, Taranaki, Manawatu/Wanganui and Southland.
Year on year Christchurch saw a 7.4% rise in property prices, while prices in Auckland were up 1.7% and in Wellington prices rose 1.1%.
REINZ spokesman Peter Thompson said he expects to see a lift in sales in the coming months as homeowners prepare their properties for the spring market. ‘We are seeing a similar pattern to last month with sales volumes down, but prices remaining stable in contradiction of predictions of a falling market. Good sales are still being made and properties priced right are attracting a lot of attention and are selling,’ he explained.
Some analysts expect though the market to be weak for some time. ‘We expect this theme to continue for the foreseeable future, which also portends a sluggish residential investment and consumer spending backdrop,’ said Goldman Sachs JB Were economist Philip Borkin.
ANZ economist Mark Smith said the low number of sales and rising days to sell suggested there was not a lot of optimism in the housing market. ‘The June and July hikes by the Reserve Bank would be one factor encouraging increasing caution by buyers. Offsetting this, however, have been recent cuts to fixed mortgage rates, which may start to entice more buyers into the market,’ he said.