Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ house sales drop 20% in April as central bank moves bite

NZ house sales drop 20% in April as central bank moves bite

By Suze Metherell

May 12 (BusinessDesk) – New Zealand house sales fell 20 percent in April from a year earlier, extending a decline in sales of cheaper property as the Reserve Bank’s restrictions on low-equity mortgages and interest rate hikes weigh on buyers.

The number of houses sold by real estate agents fell to 5,670 in April, from 7,104 in the same month last year, according to the Real Estate Institute of New Zealand. The number of properties sold below $400,000 slid 32 percent to 2,497, accounting for 44 percent of all turnover compared to 51.4 percent a year earlier.

Sales of houses between $400,000 and $600,000 fell 14.3 percent to 1,557 as did sales of houses between $600,000 and $1 million down 6.2 percent to 1,185, while $1 million plus purchases climbed 14.3 percent to 431. The top two brackets of $600,000 plus housing turnovers made up 28.5 percent, compared to 23.1 percent a year earlier.

The national median sale price fell 1.8 percent from a record $440,000 in March to $432,250 in April. The REINZ stratified housing price index, which smooths out peaks and troughs, climbed 8.5 percent to a record 3971.2 points in April, compared to a year earlier.

“The number of sales in the sub-$400,000 category continue to fall faster than the market over all, suggesting that the loan-value-ratio restrictions are continuing to have an impact on buyer intentions at the lower price points,” chief executive Helen O’Sullivan said. “Commentary from real estate agents around the country indicates that first home buyers are an even scarcer commodity than they were in October and November last year.”

Last October the Reserve Bank imposed restrictions on the level of mortgage lending banks could make on a deposit of less than 20 percent. The expectation is the restrictions will remain in place until late this year, and were introduced as part of Governor Graeme Wheeler’s attempt to slow the housing market without hiking interest rates for fear of fuelling demand for an already elevated currency.

Since then, Wheeler has lifted the official cash rate a quarter-point to 2.75 percent but last week signalled rate rises may not be as regular as previously assumed if the exchange rate remains strong. The high kiwi dollar weakens tradables inflation and would be a factor in the bank’s view of the “extent and speed” of hikes in interest rates, Wheeler said at the time.

Today’s REINZ figures showed all of the 12 regions surveyed declined in April, compared to March, with Southland reporting the largest monthly fall in sales dropping 28.7 percent.

The number of houses sold in Auckland fell 20 percent to 410 to the year earlier, while the median sale price climbed 10.1 percent to $611,000. Canterbury/Westland sales fell 15.8 percent to 786 and median price climbed 141.9 percent in the year to $395,000.

Both regions recorded a drop in median house prices in the month, although April is often a quieter month after a busy March and further impacted by Easter and school holidays, “however, these factors cannot explain the entire drop between April this year and April last year – the volume of sales has retreated to 2012 levels,” REINZ’s O’Sullivan said.

The average number of days to sell was unchanged in the year at 33 in April, and fell by one day compared to March.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Auckland Outage: Power Mostly Restored Overnight

Vector wishes to advise that all but 324 customers have been restored overnight. These customers are spread throughout the network in small pockets. The main St Johns feeder was restored around midnight allowing most of the customers in all affected areas to have power this morning. More>>

ALSO:

Half Empty: Dairy Prices Drop To Lowest Since August 2009

Dairy product prices fell to the lowest level in more than five years in the latest GlobalDairyTrade auction, led by declines in butter milk powder and whole milk powder. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news