Property sales were 16% lower in April than in April last year, according to the Mike Pero Mortgages-Infometrics Property Cycle Indicator. Furthermore, April's median house price fell NZ$4,500 from March and annual price growth slowed to 4.7% per annum, the weakest result since July 2009. Read the Mike Pero-Infometrics press release below:
The property market continued its downward trend in April, according to the latest Mike Pero Mortgages-Infometrics Property Cycle Indicator (PCI). “The nationwide PCI slipped into negative territory for the first time since April last year,” says Mike Pero Mortgages Chief Executive Shaun Riley. “Despite sales activity in April looking stronger than it had over the first few months of the year, sales volumes were 16 per cent lower than in April last year. It was in April 2009 when sales started to pick up following the recession and global financial crisis. “The median house price dipped $4,500 from March and annual price growth slowed to 4.7 per cent per annum, the weakest result since July 2009,” he says. The Mike Pero Mortgages-Infometrics Property Cycle Indicator fell to a negative 0.87 in April, from 1.62 in March. 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, was down slightly from the same time last year. “The average number of days to sell property in April was 40 days, down just two days from April last year. The annual improvement was the smallest in a year and represents a deteriorating trend in the rate of turnover since the start of this year.” “All regions moved into negative territory in April, with the exception of Auckland which managed to retain a positive PCI.” Auckland dropped off to 2.15 (down from 3.95 in March) and Wellington also lost ground, moving into the negatives with a PCI of -0.14 (from 1.92 in March). In the South Island, Canterbury/Westlandʼs PCI moved further into negative territory with a PCI of -4.15 (a decrease from -2.05 in March), as did Nelson/Marlboroughʼs, with a PCI of -3.53 (from -1.54). Otago also lost ground with a PCI of -4.91, down from -2.48 in March. Rental inflation reached a new 19-month high of 4.1 per cent in April, maintaining the signs of stronger rents that have been evident since February. Floating mortgage rates remained at 6.0 per cent again in April. Fixed mortgage rates were once again slightly lower than the previous month, as financial markets had some doubts about when the Reserve Bank would start increasing the Official Cash Rate (OCR). However, some of these falls, particularly for one- and two-year rates, have been reversed following the strong labour market data released in early May.