House Prices Holding Up, Sales Slower

Media Release: 14 September 2007

(Note – the PCI report is attached as a PDF).

House Prices Holding Up, Sales Slower: Auckland Housing Market Shows Resilience

Houses are continuing to sell in a reasonable time with prices holding up, although the number of houses being sold is sharply down on a year ago, according to the latest Mike Pero Mortgages-Infometrics Property Cycle Index (PCI).

“Given the interest in the housing market and predictions of a slowdown we have released today the PCI index covering the winter months of June, July and August,” says Jeff Staniland, Chief Executive of Mike Pero Mortgages.

The August PCI remains positive on the back of strong house price growth. Regionally, Auckland, Northland and Southland’s property markets are all gaining momentum.

National house price inflation was 12 percent annually in the August quarter, down only slightly on the previous quarter. The time taken to sell a house has not changed significantly with the average house taking 33 days.

“The number of houses sold in the August quarter, however, was down 15 percent on a year ago which is what the perceived weakness in the housing market is being based on.”

The Auckland and Northland housing markets showed resilience in the three months ended August 31. Auckland had an August quarter PCI of 5.16 (8.99 in the June quarter) while Northland was 3.5 (4.4). Southland was the only other area to record a positive PCI of 2.01 (4.07 in the June quarter).

Nationally the PCI eased to 2.23 in the August quarter from 5.42 in the June quarter.

“Historically the PCI shows the housing market is cyclical and it dipped into the negative for three quarters in 2004 and for most of 2006 even though house prices were continuing to appreciate strongly,” says Jeff Staniland.

“Thursday’s decision by the Reserve Bank to hold interest rates we hope signals the end of the interest raising cycle. Rising rates and credit market jitters have reduced general confidence and people are being more cautious about major financial decisions.”

Households have come under more financial pressure over the last few months due to rising interest rates and other costs.

“We are seeing a lot of clients who want to review their mortgages and general financial situation and we are helping them assess their options. We are also seeing genuine house buyers looking for value in the market and seeking trusted unbiased advice,” concludes Jeff Staniland.

ENDS

See... Mike Pero Mortgages PCI Report

© Scoop Media