House-sale rebound shows there's life left in market

The number of houses sold nationally jumped by 27 per cent last month, compared with April, and Auckland's median house price set a record of $400,000.

Figures from the Real Estate Institute yesterday showed 9642 houses were sold throughout New Zealand in May, up from 7576 in April.

The national median price stayed steady at $305,000.

Institute president Howard Morley said the activity showed the property market was resilient, although in most regions it was taking longer to sell houses.

The most spectacular price rise in the Auckland region was in Papakura, where prices were up 14 per cent in one month to $319,000, due mainly to a number of higher-priced sales. The institute said the number of sales in Papakura also rose, from 89 houses sold in April to 94 last month.

Nationally, vendors took 38 days to sell their houses last month, compared with 34 days in April. But Mr Morley said people should remember that the time it took to sell was still short by past standards.

"Even at 38 days to sell, we are sitting below the average of the past 10 years which, for the month of May, was just over 40 days."

Westpac economist Nick Tuffley said the market was still showing conflicting signals.

Although large numbers of properties were selling - which was a sign of strength - it was taking longer to sell them, a sign of weakness.

When seasonal factors were taken out of the latest data, he said, the number of sales last month rose 20 per cent, which was a significant rebound. The Reserve Bank would be keeping its eye on the market, he said, and viewing the latest rise in the number of sales with interest.

"They'll be very wary about the housing market taking off again," he said.

Subdued market to last for next two or three years

BNZ economist Tony Alexander said the latest data showed prices were flattening, and properties were taking longer to sell. This was consistent with a more subdued housing market, which he said would last for the next two or three years.

Mr Alexander said one of the sharpest indicators of activity was the number of days it took to sell.

In May last year that figure was 29 days. The figure was now up to 38 days, which he said was clear evidence of the flattening market.

This measure was important and people should take more interest in this more accurate indicator, he said, and be less interested in sales volume or price movements from one month to the next.

* An earlier version of this story said the national median price rose to $305,500. Incorrect information was supplied by consultants to REINZ.