Indices disagree over sales and values in New Zealand property market

Residential property sales in most regions are up from a year ago

Residential property sales in New Zealand slowed slightly in April, but are up from a year ago in almost every region in the country, the latest figures from the Real Estate Institute of New Zealand (REINZ) show. Sales for April were 13.8% higher than this time last year, to a total of 5,676, according to the data.

But the latest data from the QV index shows that values in New Zealand continued rising in April and sales are still strong. QV said that values are up 0.4% over the past three months and 3.1% up over the past year. Values are now 2.9% below the previous market peak of late 2007, its data shows.

REINZ said that all regions apart from Taranaki and Wellington recorded increases in sales volume compared to April 2011. Hawkes Bay and Northland saw jumps of more than 30%.

But sales volumes in April fell by almost 23% compared to March. However, REINZ chief executive Helen O’Sullivan said that was a normal pattern for this time of year.

The REINZ Housing Price Index fell 0.3% in April compared with March. Apart from Central Otago Lakes, all regions recorded double digit falls in sales volume compared to last month.

After reaching a record high of $370,000 in March, the national median house price eased back by $5,000 to $365,000. Hawkes Bay sale prices set a new record median for the region of $296,000 which O’Sullivan said was indicative of some improvement in activity in the regions.

‘While the national median price has pulled back from the record set last month the trend is still moving up, although not at a great pace,’ O’Sullivan said.

Activity mostly remains flat outside Auckland and Christchurch although Auckland recorded its highest number of transactions in an April since 2007. But with a total of 2,157 sales, this is far below April 2007’s 2,843 sales.

‘Nationwide values have once again increased slightly in the past month, continuing the trend that has persisted for the past year. The marginal drop in values in March appears to have been a temporary blip,’ said QV valuer Glenda Whitehead.

She explained that there continues to be variability across the country but slight increases in values in parts of Auckland, Wellington, Hamilton and several of the provincial centres are helping to push up nationwide values.

She also pointed out that sales activity has been strong for the last few months, with volumes at the highest levels since 2007.

‘Some of the increase in activity has been due an increase in confidence amongst home buyers, releasing some of the pent up demand caused by several years of lower than usual sales activity. First home buyers are also active in most of the main centres, in part encouraged by the Welcome Home Loan package and low interest rates,’ she said.

She added that sales activity will slow down a little over winter but the increased confidence in the property market is likely to carry through into Spring.

Values in the wider Auckland area increased 0.6% over the past three months, and are 5% up over the past year. Values in the old Auckland City are rising faster than any of the other main centres, at 6.8% over the past year and are now 5.1% higher than the previous market peak in 2007.

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