Double housing delight sends sales figures up

By ALAN PERROTT and AGENCIES

Low mortgage interest rates and falling house prices have helped first home buyers boost residential property sales to a five-year high.

The number of homes sold last month was up by more than 2000 on November last year, say Real Estate Institute sale statistics.

Last month, 7881 homes changed hands compared with 5810 in November last year, with a corresponding increase in total value of sales from $1.23 billion to $1.69 billion.

The sales figures are based on information provided by real estate agents nationwide.

Institute president Rex Hadley said last month had the highest level of monthly sales since November 1996, when 8468 homes were sold.

House sale prices dropped by 1.56 per cent nationally last month with sinking median prices in Auckland, Canterbury/ Westland, Northland, Otago, Waikato/ Bay of Plenty/ Gisborne and Southland.

"Many people have an improved standard of living, but most importantly, the first home buyers have returned to the market with gusto," Mr Hadley said.

"It's all being driven from the bottom up because these people now have the confidence to make that first step."

The institute recorded 2706 sales in the Auckland region last month, up from 2187 in October, although the median sale price dropped by $13,000 because of increasing sales at the lower end of the market.

The number of sales in Waitakere City also rose between October and last month, the median price dropping from $200,000 to $197,000.

Similarly, sale numbers were up and prices were down in Auckland City, where the median price fell from $300,000 to $266,375.

North Shore and Manukau City went against the trend. The median sale price on the North Shore rose from $267,750 to $272,500, and in Manukau City it went from $246,750 to $255,000.

The apparent increase in first home buyer interest goes against the findings of the last AMP Banking Home Affordability survey, which said home buying affordability had declined by 2.1 per cent because of improving home values.

But banking operations manager Noel Kirkland concluded that falling mortgage interest rates still meant it was still a good time for first home buyers.

The residential property market may have also benefited from the international nervousness following the September 11 attacks on the United States.

Although the institute said the sales figures proved home ownership was still a large part of New Zealand culture, its claim was disputed by a survey from Massey University.

The survey said that in 1986, 73 per cent of New Zealanders owned the homes they lived in - the highest proportion in the world at that time - but we now barely scrape into the top 10 with 66 per cent home ownership.