Housing Continues to Gain Momentum

Media Release
Wednesday 18 November 2009

The New Zealand housing market looked much brighter last month, following on from the momentum gained in the previous two months, according to the latest Mike Pero Mortgages-Infometrics Property Cycle Indicator.

“The growth in house sales has increased rapidly, with 40 per cent more sales occurring over the last three months compared to the same period a year earlier,” says Mike Pero Mortgages Chief Executive Shaun Riley.

“The median house price rose to $355,000 in October, its highest level on record. This was partially the result of higher quality houses being sold. The REINZs stratified house price measure was still down 3.1% on its November 2007 peak.”

The Mike Pero Mortgages-Infometrics Property Cycle Indicator climbed to a positive 7.39 in October, from 6.98 in September. The Property Cycle Indicator is a sensitive measure of the housing market and includes three main factors: changes in the number of houses sold; changes in price; and the time taken for houses to sell.

The third measure of the Property Cycle Indicator, the time taken for houses to sell, has fallen to their lowest level since September 2007 (seasonally adjusted).

“The average number of days to sell property fell to 31 days in October, two days fewer than in September.

“The two big North Island markets of Auckland and Wellington are showing strong signals and are leading the market according to the Property Cycle Indicator,” says Shaun Riley.

Auckland led the country in October with a PCI of 8.79 (from 8.26 in September) and Wellington not far behind with a PCI of 8.28 (from 7.21 in September).

In the South Island the Canterbury/Westland’s PCI was 5.04 (edging up from 4.91 in September), Southland’s was 2.44 (2.38), and Nelson/Marlborough’s was 3.16 (from 3.08). Otago made the biggest gain with a PCI of 3.75, up from 3.16 in September.

Rental inflation remained remarkably weak in September, with average rents in the three months to October unchanged from a year ago.

During October floating mortgage rates eased to 6.0%, which is the lowest average floating mortgage rate since August 1965.

See pdf attachment for PCI graphs and background information:

http://img.scoop.co.nz/media/pdfs/0911/mikeperohousing.pdf

ENDS

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