Residential real estate sales in New Zealand have dropped to their lowest September level in at least a decade and prices are also down, the latest figures to be published show.
Some analysts believe that the national figures are being dragged down by a lack of activity in the Christchurch property market after the recent earthquake.
The Real Estate Institute of New Zealand monthly housing price index fell 0.3% during September and 1.3% compared to the same time last year. The 4,323 residential properties sold during September was less than half the number of properties sold in September 2006,when the market was at the height of the property boom, the Real Estate Institute said.
The earthquake continued to knock sales with just 396 houses sold in Canterbury/Westland during September, less than half of that recorded for the same month last year. The region typically accounts for 15% of nationwide sales.
Alistair Helm, REINZ chief executive, said the real estate market in the Canterbury region is ‘struggling’ but the situation was not surprising given the catastrophic impact of the earthquake.
The company’s September property report showed just 1,211 new listings were added in Canterbury last month, down a seasonally adjusted 19% from August. ‘Half way through October the picture is looking very similar with new listings still down,’ he said.
Meanwhile the median sales price in Auckland bounced back to $450,000 last month, after dropping to $445,000 in August, according to the figures. Sales were also up to 1,690 in Auckland during the month, from 1,487 houses sold during August.
The overall sales though remain subdued across the country and some of this is due to uncertainty over the increase in GST and tax cuts and shocking spring weather.
‘We would expect to see a pick up in the market in coming months as warmer spring and summer weather generally brings an influx on new property listings onto the market providing more choice for buyers,’ said REINZ spokesperson Bryan Thompson.
The national median number of days it takes to sell a property remained steady at 43 for September, the same as the previous month but still 10 days longer than the 33 days recorded in September 2009.
ANZ economist Mark Smith said the latest REINZ figures suggested a lack of optimism in the housing market. He believes that an apparent slowing in the economy over the last few months was likely to instil greater caution in buyers.
‘Although fixed term mortgage rates have fallen considerably since the start of the year, this does not appear to have an appreciable impact on the housing market as yet, with variable rate mortgages still the best game in town,’ he said.