Outlook Positive for Property Market
REAL ESTATE INSTITUTE OF NEW ZEALAND
03 March, 2000
The outlook is remarkably positive for both the residential and rural property, despite the rather ‘tumultuous’ economic and political environment the property market has experienced, according to Mr Max Oliver, National President of the Real Estate Institute of New Zealand.
Mr Oliver said today that the optimism of the property market had been borne out by both the REINZ statistics and recently published research by the Ministry of Agriculture and Forestry.
“Despite two seasons of drought and the impact of international financial crises on export returns, there are many positive indications of sector recovery. A publication released last week by The Ministry of Agriculture and Forestry projects an increase in agricultural revenue by 18 per cent by 2003, which can only add to the increasing confidence of rural communities.”
Mr Oliver noted that the this has obviously been offset by the effect of rising mortgage interest rates and an increase in farm expenses of 1.2 per cent in the last quarter of 1999, but assuming worldwide economic growth continues and the exchange rate remains favourable for commodity exports, we can expect an increasingly positive rural sector.
The national sales median price for rural property rose on month to month comparison, with January’s figure of $526,500, up from the December median of $447,500 but down on the January 1999 median of $548,000.
The national sales volume for January was 128, up from the January 1999 volume of 117 but down from the December volume of 154.
“One can’t underestimate the breadth of the rural sector in terms of interpreting the statistics. The overall figures can often mask the upward and downward movement of individual sectors. It is when you compare these sectors in isolation that you gain a clear picture of their health. A prime example is arable properties, whose median sale price was up 35.51 per cent on a year to year basis, despite a slight downward movement in the national sale price over the same period.”
Mr Oliver noted that this too was often the case in the residential property market.
“On a regional basis, there have been some outstanding success stories. Wellington continues to go from strength to strength, with an increase in median price from $167,500 to $185,000 over the last twelve months and Northland, who over the same period saw values rise from $147,500 to $171,250, despite a relatively modest increase in the national sales price over the same period.”
The national median sale price fell slightly on a month to month basis but rose on year to year comparison. The national median for January was $169,250, compared to $170,000 in December and $164,000 in January last year.
The national median sales volume for residential property has risen on a month to month basis but fallen on year to year comparison. Sales in January this year were 5,178 compared with 4,710 in December and 6,376 twelve months ago.
The latest figures show Wellington medians have remained strong at $185,000 although the Auckland median eased $5,000 to $230,000 in January.
However a comparison since January 1999 shows the Auckland median has remained within a range of $230,000-$238,250 on a year by year basis. The Wellington median has grown consistently from $145,000 in 1997 to $185,000 at present.
Mr Oliver said, “The current figures are relatively reassuring considering the current economic and political environment. The national median sales price is steady and volumes are relatively low - the value of homes is not dropping, which is an indication of the markets confidence.
The majority of lending institutions announced an increase in both their floating and fixed interest rates in the month to February 10, with floating rates moving to range between 6.50 and 7.60 per cent, compared to the 6.50 to 7.25 per cent available in the month to January 10, 2000.
One year fixed rates now range between 6.85 and 8.50 per cent, a half per cent increase from the 6.85 to 8.0 per cent of last month. Five year fixed rates now range between 8.70 and 9.35 per cent, while fixed two, three and four year mortgage rates now range between 7.75 and 9.15 per cent.
Section activity increased, while the national median price rose with 510 sections sold during December at a median price of $85,00, compared to 402 in December at $80,000.
Lifestyle block sales rose on a year to year basis from 332 transactions in January 1999 to 408 sales in the latest period, while the median price of $ 175,000 for January 2000 compares to $185,000 for January 1999 and the $173,000 recorded last month.
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