Housing Market Continues to Slide

Housing Market Continues to Slide

The property market continued its downward slide in June, according to the latest Mike Pero Mortgages-Infometrics Property Cycle Indicator (PCI).


“The nationwide PCI fell again in June and has not been lower since February 2009. It’s also likely to get close to the lows of 2008 in the second half of this year,” says Mike Pero Mortgages Chief Executive Shaun Riley.

“House sales activity last month (seasonally adjusted) was at its weakest since the height of the financial crisis in November 2008, with sales down 24 per cent from June last year.

“The median house price lifted $2,500 from May, with annual growth holding steady at 3.7 per cent,” he says.

The Mike Pero Mortgages-Infometrics Property Cycle Indicator fell to a negative 6.16 in June, from -3.69 in May. 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.

“Houses continue to spend longer on the market before selling, taking an average of 45 days to sell, which is up four days from June last year.”

Auckland moved further into negative territory to -4.90 (down from -0.92 in June) and Wellington also lost ground, dropping to a PCI of -4.95 (from -2.55 in June).

In the South Island, Canterbury/Westland’s PCI dropped slightly to -542 (a decrease from -4.89 in June), as did Nelson/Marlborough’s, with a PCI of -5.23 (from -4.54). Otago also lost ground slightly with a PCI of -7.04, down from -6.70 in June.

Rental inflation in June was 3.1 per cent per annum, which is up from 1.9 per cent the previous month.

Following the Reserve Bank’s increase in the Official Cash Rate (OCR) in early June, floating mortgage rates lifted from 6 per cent to 6.25 per cent. One-year fixed mortgage rates also edged about 10 basis points higher as well, while there was little change in longer-term rates (two- to five-year rates have fallen substantially since the start of July).

ENDS

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