Record Low House Sales in October - REINZ

The Real Estate Institute of New Zealand (REINZ) has reported 3903 properties were sold in October, which was the lowest October total since REINZ records started in 1992. The volumes were only slightly above the all-time record low for any month of 3666 hit in January this year, and were down 36 per cent from October a year ago.

The median house price was unchanged at $350,000, but the stratified House Price Index, which removes the distortions from sales of more expensive or cheaper properties from month to month, fell 0.9 per cent in October from September.

The House Price Index, which was built in consultation with the Reserve Bank, shows house prices are down 3.5 per cent from a year ago and down 6.5 per cent from their November peak.

Sales were also lower than the pit of the 2008 housing recession when 4469 were sold in October 2009 and down from 4323 reported in September this year.

Goldman Sachs economist Philip Borkin said the housing market was in the midst of a 'double dip' and falling house prices were likely to cement the current cautiousness hanging over the consumer.

With regard to the outlook for monetary policy, we see it as relatively simple: until the housing market shows signs of stabilisation, we believe the RBNZ will remain planted on the sidelines."

The medium price in Auckland rose $10,000 to $460,000 during October, while the number of days to sell was 36.

Prices in North Shore City ($530,000 to $531,000) and Manukau increased ($420,000 to $462,500), but fell in Waitakere City ($380,000 to $375,000).

The Auckland City market was hit the hardest with prices falling to $483,500 last month from $525,000 in September.

Wellington house prices dropped during the month from $398,500 in September to $390,336 last month.

Prices in Christchurch held steady at $338,000 during October and sales were up from 237 in September to 343 last month.

REINZ spokesperson Peter Thompson said while some of those sales may have been delayed transactions, it was good to see activity picking up again in such a badly affected area.

The usual spring influx of listings had been late across the country this year but activity was picking up and the November figures should be better, Thompson said.

"People planning to change houses appear to have held back on listing their current homes until they see what else is available and how the market is moving," Thompson said.

Volumes were down, but prices remained stable, he said.

"Both prices and the level of activity in the real estate market are healthier now than they were in October 2008 when the median price fell back to $335,000 and the days to sell were 47 compared with 41 in October this year."

ANZ economist Mark Smith said the report was consistent with the Reserve Bank's assessment of housing market weakness, its Official Cash Rate assessment and yesterday's financial stability report.

"If current housing market weakness persists it is likely to continue weighing on household spending, with the implication that the Reserve Bank may leave the OCR on hold for longer than the first few months of 2011," he said.

This article is kindly republished courtesy of NZ Herald & Interest.co.nz

Posted: 12 Nov 2010