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Housing Market Continues Downward Trend
Housing Market Continues Downward Trend
The property market continued to deteriorate in May, according to the latest Mike Pero Mortgages-Infometrics Property Cycle Indicator (PCI).
“The nationwide PCI
slipped further into negative territory last month and is
now at its lowest level since March last year,” says Mike
Pero Mortgages Chief Executive Shaun Riley.
“House
sales activity was weak again in May, with sales volumes
down 17 per cent from May last year.
“After falling
in April, the median house price was down a further $6,000
in May. House prices are now up 3.7 per cent from May last
year, which is the slowest growth rate since July 2009,”
he says.
The Mike Pero Mortgages-Infometrics
Property Cycle Indicator fell to a negative 3.71 in May,
from -0.86 in April. The Property Cycle Indicator is
a sensitive measure of the housing market and includes three
main factors: changes in the number of houses sold; changes
in price; and the time taken for houses to sell.
The
third measure of the Property Cycle Indicator, the
time taken for houses to sell, deteriorated from the same
time last year.
“For the first time since March last year, houses spent longer on the market than in the same month the previous year. In May 2010, the average number of days to sell property was 43 days, compared to 42 days in May 2009.”
“All regions moved further into negative territory in May, with Auckland also having a negative PCI last month.”
Auckland moved into
negative territory to -0.95 (down from 2.17 in April) and
Wellington also lost ground, dropping to a PCI of -2.57
(from -0.12 in May).
In the South Island,
Canterbury/Westland’s PCI dropped slightly to -490 (a
decrease from -4.14 in April), as did
Nelson/Marlborough’s, with a PCI of -4.55 (from -3.51).
Otago also lost ground with a PCI of -671, down from -4.89
in April.
Rental inflation eased to 1.9 per cent per
annum in May, which is weaker growth than in previous
months, but still stronger than at any other time since the
end of 2008.
Trends in mortgage rates were mixed in May, with one- and two-year fixed rates rising in anticipation of the Reserve Bank’s Official Cash Rate (OCR) increase. Three- and four-year rates were slightly lower as the wholesale yield curve flattened. Floating mortgage rates were steady at 6 per cent.
ENDS
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