House sales running hot despite cooling weather

Photo / Janna Dixon

Auckland's housing market is humming through the winter, with prices up in most suburban areas.

Data out yesterday from the Real Estate Institute and national agency chain Harcourts showed increases.

The institute said the median house price was down $6000 nationally.

Wendy Alexander, Barfoot & Thompson chief executive, said the long summer meant people relaxed, stayed in their summer clothes longer, avoided shopping malls and traded their houses.

"Now we're all going brrrrrr. Everyone is burrowing in. We're having a very quiet June. But in April and May, there was tremendous demand," she said. Barfoot's wanted more listings to satisfy buyer demand.

Glorianne Campbell of the institute said a combination of more demand and more expensive houses selling probably pushed up Auckland prices.

North Shore's median rose to $550,000 in May from April's $540,000 and was a big jump on the May 2009 median of $505,500, the institute found.

Waitakere's median increased to $400,500 from $394,000 in April and May 2009's $357,500, although Papakura's median dropped by $31,000 from April to May on the back of 54 sales last month.

Medians within Auckland City Council's territorial limits increased to $520,000, from April's $518,000 and May 2009's $519,750.

Manukau's median rose from $432,000 in April to $438,000 in May.

Harcourts sold 400 properties in the northern region, including Auckland, for an average $539,000 last month. That was up on last May's 387 sales for an average $471,000.

Bryan Thomson, just promoted to head of real estate operations in Australasia for Harcourts International, said New Zealand's property market showed "considerable inaction". He expects this to change in spring when warmer weather could spur more activity.

The institute said the market was still holding up well. Tax changes and rising mortgage interest rates could have taken a higher toll.

April's national median price of $356,000 fell to $350,000 and relatively low numbers of houses were sold.

Institute president Peter McDonald said this was not so bad.

"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," he said. Agents sold 5206 residential properties last month and 5207 in April.

"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. 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 said.

Economists were less optimistic.

ASB economist Jane Turner said the house sales market remained at very weak levels and volumes were now down 17 per cent annually.

"Budget uncertainty and looming interest rate increases were likely weighing on housing market sentiment throughout May. Reflecting the weak demand, house prices slipped 1.4 per cent over May, although remain above levels of a year ago.

The median number of days to sell lifted to 42 days and is now just slightly above average levels, suggesting the balance is tipping in favour of buyers. New listings remain very low.

However, with demand also very subdued this has allowed total housing supply to remain around average levels on the Auckland market and slightly above average on a nationwide basis," she said.

"The fundamentals for the housing market remain fairly weak over the next year. With the tax policy changes, rising interest rates and slowing net migration are also likely to reduce demand for housing. As a result, we expect the housing market to remain in favour of buyers over the second half of this year," she said.

Philip Borkin of Goldman Sachs JBWere said the latest numbers were soft but this was not new.