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Property Market Activity Low and House Prices Fall

Wednesday, 19 January 2000

Property Market Activity Low and House Prices Fall


Both the national median sale price and the national median sales volume for residential property have fallen on a month to month and a year to year basis, according to figures released today from the Real Estate Institute of New Zealand.

The national median sale price was $170,000 for December, compared to $172,000 in November and $168,000 in December last year. Sales in December this year were 4,710 compared with 6,661 in November and 6,170 twelve months ago.

According to the National President of the Institute, Mr Max Oliver, "While the activity is down, house prices are remaining relatively steady, considering that the national median has fallen by only $2,000. When we take into account the rising mortgage interest rates, the figures for December are not unexpected."

"For the October - December period the national sales volume has fallen from each corresponding month in 1998. Conversely, homes are retaining their value. It is obvious that the major catalyst for reduced volumes is the increased residential mortgage interest rates in the last quarter of 1999. In December 1998 a three year fixed tern mortgage could be taken at an interest rate of 7.15 per cent. In December 1999, the lowest available fixed interest rate for the same term is 8.10 per cent, with every indication from lending institutions that rates will continue to rise."

"With the increase in the Reserve Bank Optional Cash Rate today to 5.25 per cent, further raising of mortgage interest rates seem inevitable, however it seems unfortunate that it is the New Zealand home owner who will bear the burden of the Reserve Banks push to control inflation."

Mr Oliver noted however, that despite the falling volumes, the public still have confidence in residential property.

He said, "Comment from our members reveals a substantial level of enquiry from home seekers, indicating a high caution on the part of potential home owners, rather than an unwillingness to enter the market."

The median price across the North Island rose on a month to month basis, with the exception of the greater Auckland area; while the median price across the South Island fell on a month to month basis, with the exception of Otago which recorded a median price of $145,000, consistent with November 1999. Nationwide, only regions not to experience a rise in median price on a year-to-year basis were Canterbury, Otago and Southland.

All regions experienced a decrease in sales volume against December 1998 and November 1999.

Section activity decreased, while the national median price rose with 402 sections sold during December at a median price of $80,00, compared to 625 in November at $78,000.

REGIONAL HIGHLIGHTS:

NORTHLAND
A total of 134 homes changed hands in Northland, compared to 200 in November. The median price for the area was $144,000, up from the $142,000 recorded in the previous month and from the $137,000 for December last year, when 173 homes were sold.

AUCKLAND
In Auckland, a total of 1,452 home settlements were recorded during December, down from the 2,234 recorded in November. The median price for the region was also down, at $235,000 in December from $238,050 in November. The median for December 1998 was $229,625, when 2,150 homes changed hands.

On the North Shore, home sales fell from 398 in November to 276 in December, and were also down on the same month a year ago when 384 homes were sold. The median price fell on both an annual and monthly basis, from $256,750 in December 1998 to $253,750 in the latest period, compared the $257,500 recorded in November.

A total of 217 homes were sold in Waitakere City, down from the 295 recorded last month and from the 314 recorded last December. The median price was $205,000, compared to the $200,500 recorded in November.

In Auckland City 417 homes changed hands, down from the 780 sales recorded in November and on the 809 recorded in December 1998. The median price of $280,000 was up on both the November median price of $269,500 and the $260,000 recorded twelve months ago.

Home sales and median fell on a month to month basis in Manukau City, with 331 homes changing hands at a median price of $228,000. This compared with 453 sales and a median price of $230,000 in November and 426 sales recorded last December at a median price of $215,250.

In the Papakura district, 37 homes changed hands, compared to 77 in November and 53 in the same month last year. The median price of $190,000 compared to the $198,000 recorded in November and the $170,000 for December 1998.

A total of 1,278 home settlements were recorded in Metropolitan Auckland, down from the 2,003 in November and from the 1,986 recorded for the same month last year. The median price of $238,300 is down from November's figure of $240,000 but up from $235,000 recorded for December 1998.

WAIKATO/BAY OF PLENTY/GISBORNE
Sales decreased in the Waikato/Bay of Plenty/Gisborne region with 748 homes changing hands, compared to 991 in November. The median price fell to $162,000, from the $165,000 recorded in November but rose from the $155,000 recorded last December when 985 homes changed hands.

HAWKE'S BAY
The median price for the region rose from $127,000 in November to $129,000 but the sales volume fell with a total of 204 homes changing hands, compared to 261 sales in November, and 209 sales and a median price of $124,000 a year ago.

MANAWATU/WANGANUI
The sales volume in the region fell with 244 home settlements recorded in December compared to 356 in November and 333 sales recorded in December last year. The median price of $107,250 was up slightly from the $107,000 of the previous month and compared to the $95,000 recorded in December 1998.

TARANAKI
Sales volumes fell with 133 homes changing hands compared to 138 in November. The median price rose during December to $108,000, up from both the $102,250 recorded in the previous month, and the $96,500 recorded in December last year when 142 homes were sold.

WELLINGTON
Median price for the Wellington region rose to $186,000, from November's $175,000 and the $174,500 recorded twelve months ago. Home transactions fell, from 864 recorded sales in November to 611 homes changing hands during December and the 742 homes sold in the same month last year.
NELSON/MARLBOROUGH
Sales volumes fell during December with 182 homes sold in the Nelson/Marlborough area, compared to 253 sales in November. The median price was down at $144,750 compared with $145,000 in November but up on the $137,500 recorded last December when 260 homes were sold.

CANTERBURY/WESTLAND
The median price fell in the Canterbury region during December to $140,000 compared to the $143,000 recorded in December 1998 and the $145,000 recorded in November 1999. A total of 656 home settlements were recorded, down on both the 874 recorded in November and the 776 recorded in December last year.

OTAGO
Volume fell while median price remained constant in Otago over the past month with 263 homes sold during December, at a median price of $95,000. This compared with 313 sales and a median of $95,000 in November and 121 sales and a median price of $104,000 in December last year.

SOUTHLAND
Sales volumes fell in the Southland region with 83 homes changing hands, compared to November when 177 homes were sold. The median price rose from $75,000 in November to $81,500 in December, compared to a median of $86,000 last December when 121 homes changed hands.

-ENDS-

Real estate information is also available via the Institute's official property directory - RealENZ - on the Internet. RealENZ is a search facility providing comprehensive information on residential, lifestyle, rural, commercial, investment and rental properties. RealENZ's Internet address is: www.realenz.co.nz

For further information contact: Mr Max Oliver, National President
The Real Estate Institute of New Zealand Inc
Phone: (09) 520 3008
Mobile: (025) 812 614
Issued by Shandwick (NZ) Limited Phone: (04) 472 4190

REINZ PROPERTY MARKET REPORT

TOTAL DWELLINGS MEDIAN PRICE COMPARISONS
DEC96 DEC97 DEC98 NOV99 DEC99
Northland 120,000 145,500 137,000 142,000 144,000
Auckland 230,000 235,000 229,625 238,050 235,000
Waikato/BOP/Gisborne 139,350 152,000 155,000 165,000 162,000
Hawkes Bay 121,000 125,000 124,000 127,000 129,000
Manawatu/Wanganui 103,000 93,500 95,000 107,000 107,250
Taranaki 102,500 105,000 96,500 102,250 108,000
Wellington 142,500 160,000 174,500 175,000 186,000
Nelson/Marlborough 130,000 142,000 137,500 145,000 144,750
Canterbury/Westland
(including Sth Canterbury) 129,000 140,500 143,000 145,000 140,000
Otago 105,000 93,000 104,000 95,000 95,000
Southland 91,750 81,000 86,000 75,000 81,500
NZ Total 154,000 165,000 168,000 172,000 170,000

TOTAL DWELLING SALES
TOTAL SALES DEC96 DEC97 DEC98 NOV99 DEC99 VALUE OF SALES
DEC 1999
Northland 234 189 173 200 134 23,050,300
Auckland 1,867 1,700 2,150 2,234 1,452 408,876,786
Waikato/BOP/Gisborne 892 921 985 991 748 130,861,423
Hawkes Bay 214 215 209 261 204 28,442,200
Manawatu/Wanganui 266 258 333 356 244 27,005,214
Taranaki 134 157 142 138 133 15,199,290
Wellington 708 812 742 864 611 125,929,262
Nelson/Marlborough 202 233 260 253 182 30,114,700
Canterbury/Westland 833 740 776 874 656 104,645,411
Otago 249 189 279 313 263 27,346,370
Southland 142 142 121 177 83 9,730,732
NZ Total 5,741 5,556 6,170 6,661 4,710 931,201,688

MEDIAN PRICE BY DISTRICT FOR DECEMBER 1999


DISTRICT DWELLINGS * RIB # SECTION
Northland 144,000 - 72,500
Auckland 235,000 455,000 108,000
Waikato/BOP/Gisborne 162,000 672,500 70,000
Hawkes Bay 129,000 32,000 60,000
Manawatu/Wanganui 107,250 141,500 28,000
Taranaki 108,000 75,000 82,500
Wellington 186,000 226,500 69,500
Nelson/Marlborough 144,750 - 76,000
Canterbury/Westland
(incl. Sth Canterbury) 140,000 267,500 79,000
Otago 95,000 380,000 34,500
Southland 81,500 - 49,500
Total NZ 170,000 310,000 80,000

* Dwelling includes houses, units, town houses, apartments, and home and income.
# Residential Investment Blocks (multi units owned by investor/s).

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