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Recovery in the housing market remained soft in February with house sale volumes at their lowest since at least 1992, figures released by REINZ today show. The average number of days to sell a property rose to 46 days in February from 43 days in January and the median house price was unchanged at NZ$350,000. (Update 1 includes comments and implications from ASB Economist).

There were 5,029 sales in February, up from 3,666 in January, but was down from 5,228 a year ago and was the lowest February sales total since the REINZ started publishing figures in 1992.

The Residential Section Price Index fell 11.3% in February from January and was down 3.4% from a year ago, REINZ said.

Real Estate Institute of New Zealand President Peter McDonald said agents reported an air of caution amongst buyers, most of whom were genuine home seekers as opposed to investors.

“Recent Government discussions of potential tax changes have halted the number of inquiries from investors who usually buy at the lower end of the price range. Most interest at present is in the $400,000 to $600,000 bracket and no change in interest rates is keeping the genuine home buyers in the market,” McDonald said.

See the full REINZ news releases here:
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Anne Gibson at NZHerald.co.nz has reported that NZIER economist Shamubeel Eaqub says REINZ figures from January that are yet to be released publicly show house sales volumes fell 17% in January after seasonal adjustment, and the median house price fell to NZ$350,000 from NZ$360,000 in December. (Update 1 includes REINZ response.)

Shamubeel Eaqub, economist at NZIER, said the Real Estate Institute had yesterday posted housing figures on its website, but issued no general statement with the numbers.

“Sales volumes plunged 17 per cent in January, once seasonal patterns are accounted for. It was -1 per cent from year earlier levels. The volume of sales is very similar to the lows we saw in 2008. This is deeply worrying,” he said. “There is suddenly a flood of unsold homes. Total listings of homes for sale were up 12 per cent in January [seasonally adjusted realestate.co.nz data], combined with a plunge in sales, this means there is now 12 months’ worth of homes for sale, up from nine months’ in December. ”

The national median which stood at $360,000 in December was $350,000 last month. It also takes 10 days longer to sell a house on average: 33 days during December but 43 last month.

We have checked the REINZ website this morning and the figures do not seem to be available publicly. We have left a message with the REINZ to check the veracity of Eaqub’s comments, but have yet to receive a reply. REINZ figures are scheduled for release on Friday.

Update 1: The REINZ returned our call, saying they could not comment on the report, except to say the final figures would be released tomorrow.

The number of new properties listed for sale on Realestate.co.nz in January fell from December for the first time in four years and asking prices on the site also fell as the market remained sluggish and favoured buyers, Realestate.co.nz reported.

Here is the rest of the release on the monthly report from real estate.co.nz below and the full report is available at unconditional.co.nz.

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By Rodney Dickens

I wrote the first “housing hell” report in August 2007. It looked at what was likely to happen to real or inflation-adjusted house prices after the mega-boom, using NZ and UK experiences. In that report I concluded that “to get the rental yield back to the historical average of 7.7%, the average rental income will have to increase 71% or the median house price will have to fall 42%. Or, more likely, some combination of the two will unfold.”

In the second “housing hell” report, written in March 2008, I looked in more detail at the extent to which house prices were out of line with incomes and rents.

These reports offered valuable insights for anyone serious about understanding the underlying economics of the housing market, which has implications to the long-term performance of house and section prices. They were not designed to quantify near-term prospects for house prices, but these reports also provided advance warning of the imminent fall in house prices.

House prices and, to a lesser extent, section prices subsequently fell and in time-honoured fashion the media was there to tell the horror stories. In a 6 January 2009 article on the front page of the business section of the Herald I was identified as picking that house prices would fall 42% in 2009 from the peak level in 2007. 42 might be the answer to the meaning of life, the universe and everything, but it wasn’t my pick for house prices in 2009 (see here for my rebuttal).

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Asking prices for property fell 1.7% on realestate.co.nz in December from November after three months of steady increases.

The full release from unconditional.co.nz is published below.

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Mortgagee listings on realestate.co.nz and trademe.co.nz have slumped by more than a third in the last 4 weeks, which was more than slide of a quarter in the same four weeks a year ago.

Figures collected by interest.co.nz and charted below show mortgagee listings (as opposed to sales) have fallen a total of 34.3% in the last 4 weeks from the previous 4 weeks. At the same time a year ago the drop was 25.3%. Banks and agents may be reluctant to put a mortgagee listing on the market over the Christmas New Year break, given that a quick uninterrupted sale is preferred.

There were 217 properties listed as mortgagee sales on realestate.co.nz this morning, down from 376 four weeks earlier. There were 222 properties listed on TradeMe, down from 292.

Data on confirmed mortgagee sales from Terralink for October show 298 sales for the month, up from 174 in the same month a year ago, but down from the record high of 343 in September. They accounted for 5% of all sales in the month of October and 24% of the sales were of owner occupier.

What’s your view on why these numbers might be down?
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