Property market 'confidence returning'

Murray Cleland
Murray Cleland
Otago property prices are steady, although sales volume is weak, but an industry spokesman believes some market confidence is returning.

In statistics released by the Real Estate Institute of New Zealand (REINZ) this week, the median price of a house in Dunedin in May was $259,000, while in Queenstown just 38 houses sold last month.

Nationally, the median price was $345,000, and REINZ national president Murray Cleland said the market was "treading water", with sales numbers down 52.9% from May last year.

In Dunedin, 145 houses sold, taking an average of 49 days to sell. In April, the median price was $245,000, with 156 sales. In May last year, the median price was $250,000, with 259 houses sold, and it took 30 days to sell.

Institute Dunedin branch president Stephen Johnston said the market was continuing the trend of fewer sales, although the median price was holding up.

The median price had been between $240,000 and $260,000 over the past 18 months.

He said most of the activity was in the $200,000 to $300,000 price range. The top end of the market was slow.

But he said a few investors were returning to the market, with North Island investors and New Zealanders living overseas showing interest.

"There is confidence sneaking back into the market. Sales volume may increase, but it's not going to go back to what it was," he said.

"That might lead to the resolve of some sellers not to sell quickly."

Mr Johnston said the Dunedin market seemed to stop quicker than the rest of the country, but also recovered quicker. The market was entering the traditionally slower winter period.

He said as in any business, when sales were at a lower level, then agents left the industry.

In Queenstown, just 38 sales were recorded, with a median sales price of $540,000. This was down from 41 houses sold in April, and 62 in May last year. The median sale price has not changed much - it was $530,000 in April, and $550,000 in May last year.

Institute Queenstown spokesman Adrian Snow said the number of sales was low, and was surprising, as many agents had been satisfied with business in May.

May was traditionally a quiet month for Queenstown, as it was between seasons. The sales downturn started about November and December last year, Mr Snow said.

It took on average 92 days to sell a house in Queenstown, compared to 48 days in May last year.

Price expectations had come down by about 10% to 15% since the start of the year.

With between 120 and 140 real estate agents in Queenstown, and 38 sales, Mr Snow said that made "pretty sad maths".

The median price for a house in Central Otago increased to $420,000 in May, from $385,000 in April. The May median price last year was $410,000. There were 41 houses sold, compared to 31 in April and 62 in May last year.

Sales volume eased in North Otago with 23 houses sold, compared to 30 in April, and 51 in May last year. The median price rose to $230,000 in May, well above the $192,500 in April, and $187,000 in May last year.

Sales volume also fell in South Otago with 15 houses sold, compared to 17 in April, and 22 in May last year. The median price rose to $160,000, from $140,000 in April, though it was $166,500, in May last year.

No houses sold in East Otago in May, compared with the eight sold, with a median sale price of $190,500, in April. In May 2007, 12 houses sold, with a median price of $261,250.

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