(WELLINGTON) New Zealand house prices fell and sales dropped in January as the previously hot market continued to cool, the Real Estate Institute of New Zealand (Reinz) said yesterday. The Reinz national median house price fell 1.4 per cent to NZ$340,000 (S$379,000) from December, but was 4 per cent higher than a year earlier.
Institute members sold 5,186 houses in the month compared with 5,597 the month before, a fall of 7.3 per cent. The figure was down 31.5 per cent on a year earlier, and was the lowest since January 2001.
National President Murray Cleland said the fall in the number of house sales meant lower prices could be expected. ‘Although we would prefer to see the next two months trends first, it is obvious that people need to be prepared for prices to move back in 2008,’ he said in a statement.
The New Zealand housing market had now turned to buyers’ advantage, Mr Cleland said. ‘It is clear from the days to sell and low sales volumes that there is a growing tension between the prices vendors are seeking and what buyers are offering – buyers have been quick to sense that the market is weakening and they are ready to take advantage of that situation.’ The median number of days taken to sell a house rose to 49 days from 36 in December and 38 days a year ago. It was the longest period to sell in eight years.
The Reserve Bank of New Zealand left its official cash rate unchanged at 8.25 per cent last month, saying that the housing market, one of its major inflation worries, was continuing to slow. The latest Reuters poll has most of the 16 economists surveyed expecting no change to rates until later this year.
Prices fell in seven of the Reinz’s 12 regions and rose in five. Prices in Auckland City, the country’s biggest population and commercial centre, fell 6 per cent and by just under one per cent in the capital Wellington.
Government agency Quotable Value reported on Monday that house prices grew 8.9 per cent in the year through January, compared with 10 per cent in December. It was the fifth-straight month that growth in house prices eased.
Source: Reuters (Business Times 14 Feb 08)