Little change in residential property market

Little change in residential property market

Despite pending tax changes and the anticipated rise in the Reserve Bank OCR there was no real reduction in residential property prices or the number of sales in May, according to figures released today by the Real Estate Institute of New Zealand (REINZ).

The median residential property price eased back to $350,000 in May from $356,000 in April and sales of 5,206 were only one down on the 5,207 residential properties sold in April even though the winter is usually a quieter period for the real estate market.

“It is good to see the market retain its strength and prices stay stable during a period when some buyers would have been concerned about potential tax and interest rate changes,” says Real Estate Institute of New Zealand President Peter McDonald.

“While slightly down on the April figure and the March median of $360,000, the May median is still 3.7 per cent up on the median price of $337,500 in the same month in 2009, so we are still not seeing any significant fall in property values,” says Mr McDonald. “With tax changes and interest rates now settled, property investors are already talking about returning to the market to cater for the growing demand for domestic rentals.”

“Nationally the number of median days to sell increased from 40 to 43 but varied across the country from as high as 67 in Central Otago Lakes down to just 35 days in Southland,” he says.

The total value of residential sales, including sections, in New Zealand in May was $2.27 billion, an increase on the April total of $2.24 billion. The breakdown of the values of the properties was 195 for $1 million plus, 601 for $600,000 - $999,999, 1311 for $400,000 - $599,999 and 3099 under $400,000. While changes in the median price vary across the country and there were falls in some areas, in 10 out of the 12 districts the increases in the median price ranged from 1 up to 10 per cent when compared with the same month last year.

Auckland residential sales, including sections, accounted for $1,082 million of total sales in May. Sales in Canterbury/Westland and Wellington were the next greatest at $260 m and $240 m respectively.

“While there has been some decline in turnover from the boom times of a couple years ago, during the past year nearly 67,000 homes were sold for a total of almost $27.5 billion so the real estate market is still very healthy,” says Mr McDonald

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