Housing Market Easing Off

Housing Market Easing Off

Although the property market continued to strengthen in February, the rate of increase has eased according to the latest Mike Pero Mortgages-Infometrics Property Cycle Indicator (PCI).

“The nationwide PCI was still positive in February 2010, but it was at its lowest value since June 2008 which shows a definite easing off in the housing market. Sales volumes in February fell 3.4 per cent from January (seasonally adjusted) to their lowest level since November 2008,” says Mike Pero Mortgages Chief Executive Shaun Riley.

“The median house was unchanged from the previous month at $350,000, but it remains 2.8 per cent below its December 2009 peak.”

The Mike Pero Mortgages-Infometrics Property Cycle Indicator fell to a positive 3.97 in February, from 5.22 in January. 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, was up from January 2010.

“The average number of days to sell property rose to 46 in February. Although this result was 16 days faster than in February last year, it is the highest seasonally adjusted level since June 2009.

“The Central Otago Lakes region was the only region in the entire country where the housing market gained momentum in February according to the Property Cycle Indicator. Its PCI was 0.52, up from 0.30 in January,” says Shaun Riley.

Auckland dropped off with a PCI in February of 5.81 (down from 7.87 in January) and Wellington also lost ground with a PCI of 4.47 (from 7.09 in January).

In the South Island, Southland’s PCI slipped slightly to 1.17 in February (from 2.20 in January). Canterbury/Westland’s PCI was 0.36 (a decrease from 2.71 in January) and Nelson/Marlborough’s was 0.59 (from 2.30). Otago also lost ground with a PCI of 0.12, down from 2.65 in January.

February rents were 4.1 per cent higher than a year earlier, which is the sharpest annual increase since September 2008.

Floating mortgage rates remained unchanged at 6.0 per cent for the fifth consecutive month. Fixed mortgage rates declined slightly in February, as the market pushed out its expected timing of any increase in the Official Cash Rate (OCR).

ENDS

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