Activity Returns To Residential Market

FOR IMMEDIATE RELEASE

News Release 11 March 2009

Activity Returns To Residential Market

There has been a marked increase in activity on the residential real estate market, February sales figures released by the Real Estate Institute of New Zealand (REINZ) today reveal.

Institute president Mike Elford says there has been a significant turn around in enquiry levels and number of sales and median prices are up in all but three out of 12 regions compared with January’s figures.

“January was an exceptionally bleak month and there is no doubt the figures were affected by the holiday period. While we must still take a cautious approach, the February figures seem to indicate that lower interest rates and real estate as an investment option are having a positive impact on the market.”

The number of home sales nationwide in February was 5,228, a big jump on the record low of 3,706 in January. However, this is still notably lower than the same period in 2008 (6,356) which in turn was a massive drop on the 9,357 properties which sold in February 2007.

There was a rise in the number of sales in all districts apart from Central Otago Lakes which had a minimal drop from 78 to 76 properties in February compared with the January total.

“The bounce back from the horrific January figures is welcome, but we must still acknowledge we’re dealing with light volumes compared with recent years,” Mr Elford said.

The median house price has also improved on January’s figures. The national median house price in February was $330,000, up $5,000 on January’s $325,000 and only slightly lower than the $337,500 median house price in February 2008 and $335,000 in February 2007. In nine out of 12 districts, higher median prices were recorded in February; the only drops were in Auckland (down from $422,000 to $421,500) Taranaki (down from $266,750 to $260,000) and Central Otago Lakes which dropped from $457,500 to $425,000.

Mr Elford noted that median house prices are currently well above all February median prices from 2000 to 2006.

The length of time it takes to sell a house – a national median of 62 days in February 2009 is consistent with the January figure of 59 days. While this is considerable longer than the 50 days in February 2008 and 32 days in February 2007, Mr Elford said it is pleasing to note there has been a drop in the number of days to sell compared with last month in eight out of 12 districts. Northland and Waikato/Bay of Plenty remained constant on 77 and 78 days respectively while in Canterbury/Westland the figure has climbed from 48 days in January to 57 days in February and from 52 to 56 days in Auckland.

“February figures are certainly an improvement on January. However, there is no doubt these are difficult times, so we must be cautious in our optimism. One month’s results do not form a trend”.Mr Elford said.

ENDS

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