11 June 2009

Source: National Business Review

The median residential property price edged down in May but the number of sales remained steady, latest Real Estate Institute (REINZ) figures show.

The median price of $337,500 in May eased from $340,000 in April and was 2.2 percent down on the $345,000 figure of May 2008, REINZ said today.

Last month 6291 homes were sold, marginally up on the 6210 in April, and well ahead of the 4372 in May 2008.

REINZ president Mike Elford said the figures showed people were prepared to pay market rates for properties, and a rise in the number of sales at the upper end of the market indicated a level of confidence.

The biggest issue was a shortage of stock, and he expected that trend to continue through June and July.

Last month it took 42 days nationally to sell a house, the same as in April and faster than the 49 days in May 2008.

In Auckland the median house price rose to $450,000 last month from $435,000 in April, and was also slightly ahead of the $447,500 in May 2008.

Hamilton City had a median of $330,500 in the latest month, up from $320,000 in April but below the $337,500 of a year earlier.

For Tauranga the median eased to $335,000 from $339,000 in April and was down on the $376,500 from May 2008.

Wellington's median rose to $380,000 from $367,500 in April but slipped from $389,500 a year earlier, while in Christchurch City the median was down to $306,000 from $317,500 in April and was also below the $315,000 in May 2008.

Sales of properties for $1 million or more rose to 180 from 151 in April, while sales from $600,000 to $1m lifted to 657 from 631.

The latest REINZ figures add to indications of a pick up in the residential property market, but doubts have also been raised about how long the improving trend can last.

At the start of the week QV Valuations said the residential property market showed "considerable improvement" in May as values stabilised.

QV national residential property indices for May recorded an 8.1 percent decline in property values over the past year.

That compared with a 9.2 percent decline reported for the year to April, and was the second month in a row where the year-on-year change had improved, QV said.

In its Monetary Policy Statement published today, the Reserve Bank said it did not expect the recent consolidation in the house market to flow through to a quick or large rebound in house prices, although it did expect residential investment to recover in 2010...