New house building sparse in New Zealand but property market stable

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New housing approvals rose in December 2011 compared to previous year

More new houses are being built in New Zealand but the sector is still suffering from a slump compared with previous years.

The actual number of new housing approvals rose in December 2011 compared with the previous year but remains at a low level, the latest figures from Statistics New Zealand show.

Housing approval numbers for December 2011 were up 13% compared with December 2010 but that year saw the lowest December figures for 46 years.

After removal of seasonal fluctuations, new housing approval numbers rose 2.1% in December 2011. Excluding apartments, there was a small decrease of 0.2%.

These movements follow several months of volatility. Trend numbers for new housing approvals rose during the nine months to December 2011, but the rate of increase is easing.

‘Most of the increase in housing approvals for December 2011 was concentrated in Auckland, Wellington, and Canterbury, with many of the other regions showing small falls,’ said industry and labour statistics manager Louise Holmes-Oliver.

‘However, in 2011, housing approvals were the lowest for a December year since this series began in 1965, down 12% to 13,662,’ she added.

But the property market in New Zealand has started 2012 in better shape than it has for the past five years with 9% more properties being sold in 2011, the latest report from the Real Estate Institute of New Zealand shows.

‘It would not be too optimistic to say that the industry, certainly in terms of volume sales has turned a corner. Some parts turned that corner six months ago, notably Auckland, whilst some will take a few more months before witnessing this change,’ said REINZ director Alistair Helm.

The average asking price remained steady, down 1% to $417,740, showing sellers were not stretching prices expectations of buyers, said Helm.

‘Historically the supply side of the property market tends to lag the demand side as measured by sales and it is likely that the coming two months of February and March will see heightened activity in new listings as the property market hits the peak of activity over these summer months,’ he added.

Meanwhile, Barfoot and Thompson, Auckland’s largest residential agency with 40% of the market, has reported its strongest January month in four years and said it expected gradual and modest increases in house prices over the first quarter of 2012.

The average sales price in January 2012 was $529,768, up 2.7% on a year ago. Sales numbers at 683 were up 21.3% and new listings at 1,031 were up 15.1%.

Managing director Peter Thompson said it was an extremely positive start to the year.

‘In January we sold more properties in the month than we have since 2007, prices reached their highest average ever for the month, new listings were up 15.1% and we sold double the number of million dollar homes than we did last January,’ he explained.

‘The seasonal dip in activity that occurs each year as a result of the Christmas, New Year and annual holiday breaks was present in the trading figures, but on every key measure this January was significantly ahead of that for January last year,’ he added He predicts that from now until late autumn new listings and sales numbers will build before starting to ease with the approach of winter. ‘Buyers and sellers are taking a measured approach and it will result in the market remaining stable and positive,’ he said.

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