House sales volumes fall as winter settles in

Queenstown dwelling prices continue to rise. Photo by Gerard O'Brien.
Queenstown dwelling prices continue to rise. Photo by Gerard O'Brien.

The number of dwellings sold in June fell 12.3% from May as winter settled in to the residential real estate market, figures released yesterday by the Real Estate Institute showed.

Otago sales figures for June in the doldrums

Fewer properties selling

There were 5736 dwelling sales in June, down 6.3% on June last year and 12.3% on the May 2014 figures.

The national median price was $427,250 for June, an increase of $33,250 compared with June last year but a fall of $2750 from May.

Institute chief executive Helen O'Sullivan said volumes continued to fall in June, as they had done for the past several months.

''We are starting to see some regions record annual falls in the number of sales at around 20%, with only modest increases in those regions where sales numbers are rising.

"At the same time, it is now taking five days longer to sell a property than it did 12 months ago.''

There was also a marked difference in the price performance for the Auckland and Canterbury-Westland regions, compared with the rest of New Zealand, she said.

During the past seven years, the national median price had increased by 23%.

Only in Auckland and Canterbury-Westland had prices risen by more than the national median, at 35% and 34% respectively.

Combined, those two regions represented more than half of the New Zealand real estate market and had dominated the increase in the national median price, Ms O'Sullivan said.

In contrast, several regions had either only small changes in their median price during the past seven years or falls in the median price.

In eight regions, representing more than 43% of the New Zealand real estate market, the median price increased by less than the change in the Consumer Price Index, the official measure of inflation, during the same period, she said.

The national median house price fell by 0.6% from $430,000 in May to $427,250 in June.

Compared with June 2013, the national median house price increased by $33,250, or 8.4%.

Eight regions recorded an increase in the median price. Sixty-eight percent of the increase in the national median price compared with June last year occurred in Auckland.

Individually, Central Otago Lakes recorded the largest increase in median price compared with June 2013, with a 12.9% increase, followed by Canterbury-Westland, with a 12.3% increase and Auckland and Taranaki, with an 8.1% rise.

Dwellings took one day longer to sell in June compared with May at 39 days. Compared with June last year, the median number of days to sell was five days longer.

In June, Canterbury-Westland recorded the shortest number of days to sell at 33, followed by Auckland at 34 and Otago at 41 days.

Nationally, 977 dwellings sold by auction in June, representing 17.3% of all sales and a reduction of 206 on the number sold by auction in June last year.

ASB economist Daniel Smith said overall sales activity has stabilised over the past couple of months and, at the same time, the number of homes coming on to the market remained low.

Both of those factors were serving to keep the overall level of inventory low, especially in the Auckland market.

''The market has clearly eased considerably since mid-2013, but recent data showing a stabilisation in activity suggests any further slowdown will be more gradual.

"In Auckland and Christchurch, we expect price gains to continue, but at a more modest pace than was seen over 2012-13.''

Prices were likely to be fairly flat throughout the rest of the country, he said.

The slowing housing market would please the Reserve Bank.

However, price growth was still running ahead of where the central bank would probably like it in Auckland and Christchurch, Mr Smith said.


At a glance

• 5736 dwellings sold in June, down 12.3% on May and 6.1% on June last year.

• National median price of $427,250 up 8.4% on June last year.

• Central Otago Lakes recorded the largest increase in median price compared to June last year.

• Auckland and Canterbury-Westland combined represent more than half of New Zealand real estate market.


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