REINZ June 08 Report

Property Market Decline Continues in June - REINZ
11 Jul 2008

The decline in the residential property market in New Zealand increased in June with Auckland, Wellington and a number of other provinces showing the biggest decreases, according to the Real Estate Institute of New Zealand (Inc).

Sales were down again, from 4,372 in May to 4,305 in June and it now takes nearly two months to sell the average property, with days to sell up from 49 days in May to 53 in June, according to REINZ National President Mr Murray Cleland.

“The market trend is consistent with the current environment and other key economic indicators, and as with the latest business confidence statistics, there isn’t a lot of confidence in the residential property market at present.”

Mr Cleland said that winter was always a quiet period for real estate, but sales in June had hit a new low; more than 3,000 transactions lower than the June 2007 figure of 7,474 sales.

“However in relative terms the decline is pretty gradual and probably not as pronounced as predicted by some commentators. The market is finding its own level quite well and there is certainly no indication of any significant slump in values.”

“People are generally deciding to stay put and deferring decisions on buying and selling until a clearer trend emerges. Where values are weaker, the explanation is often that people are selling because they are on employment transfer and our agents report that price expectations are having to be lowered to facilitate faster sales.

“However, at the current rate of easing in prices, there is a possibility that the market may bottom out in the next couple of months and then rally a little in spring.”

The lower end of the property market was relatively liquid, which contributed to the national median price falling from $345,000 in May to $340,000 in June.

Sales of properties under $400,000 were up slightly from 2,680 in May to 2,708 in June, but sales of properties valued at between $400,000 and $599,999 were down from 1,041 in May to 1,039 and properties between $600,000 and $999,999 were down from 508to 427.

Sales of properties worth $1 million and over were down from 143 to 131.

The national median price is now 2.15 per cent lower than the figure for June 2007 of $347,500 with the biggest regional decline being recorded by Manawatu and Wanganui down 13.81 per cent from $248,000 to $213,750.

Auckland and Wellington were close to the national average decrease at 2.24 per cent and 2.26 percent respectively; while Central Otago Lakes District was the exception, trading at 22.38 per cent higher than a year ago.

The Auckland median price was down from $447,500 to $435,000, with the Metropolitan Auckland median down from $451,000 to $440,000.

Wellington was similarly affected, down from $389,500 in May to $366,500 in June.

Provinces showing the most marked declines in median prices included Northland down from $310,000 in May to l$302,750 in June, Manawatu and Wanganui down from $224,500 in May to $213,750 in June, Otago down from $240,000 in May to $225,000 in June and Southland which was down from $200,000 to $182,500 in June.

However three regions recorded increased medians, including Waikato and Bay of Plenty up from $310,000 to $316,000.

This was despite a fall in the Hamilton City median from; $337,500 to $323,000, and a drop in the Tauranga median from $376,500 to $363,000.

However pushing the district median up were Mount Maunganui and Papamoa up from $395,500 to $398,000 and Gisborne City up from $200,000 to $220,000.

Hawkes Bay was down from $265,000 to $261,000, and Taranaki dipped from $285,000 to $255,000, however Canterbury and Westland went against the trend with their median up slightly from $296,000 to $299,000.