By Bernard Hickey
The Real Estate Institute of New Zealand (REINZ) has reported property sales fell to a
10 year record low of 4,411 in July from 4,575 in June and 6,014 in July a year ago.
REINZ intially released a statement saying the July sales were a 10 year low, but confirmed to interest.co.nz later on Friday that this was the lowest sales month for a July since REINZ started collecting records electronically in 1992. Figures before that are not comparable.
The July sales were even below the July 2008 low of 4,489. They were the second lowest non January month since the absolute pit of the housing recession in August of 2008 when 4,220 properties sold.
The median sales price in July fell to NZ$349,000 from NZ$352,500 in June, but is up from NZ$340,000 in July last year.
(Updated with ASB economist Jane Turner noting days to sell and inventory on market consistent with 10% fall in house prices, REINZ correction, links to REINZ data tables and full region by region reports.)
REINZ highlighted a rise in prices in Auckland, Wellington and Christchurch from a year ago. Nationwide prices fell in July 2010 as measured by the REINZ Monthly Housing Price Index.
The index based on the stratified methodology derived by the Reserve Bank of New Zealand fell 1.2% to 3191.5 in July from June. In the three months to July, the index shows housing prices decreased by 1.1%. Compared to 12 months earlier, the REINZ Housing Price Index increased by 1.8 percent. Here's more detail in the stratified measure and regional reports.
The REINZ-RBNZ stratified index of house prices, widely viewed as the most accurate and up to date measure of prices, is now down 3% from November 2009 and down 5.6% from the November 2007 record high. See our interactive chart series for the stratified measure of house prices.
That means real house prices have fallen 11% since November 2007
9, given CPI inflation over that period of 6.1%.
REINZ said remained higher than they were in July 2009 in the bigger cities, with Christchurch prices up 7.4%, Auckland up 1.7%, Wellington up 1.1% and other North Island suburbs up 2.2%. Prices in South Island cities other than Christchurch were down 2.7%. See the full report with data tables showing regional prices, volumes, days to sell here.
"We are seeing a similar pattern to last month with sales volumes down, but prices remaining stable in contradiction of predictions of a falling market," REINZ spokesperson Peter Thompson said.
"Good sales are still being made and properties priced right are attracting a lot of attention and are selling," Thompson said. The national median number of days to sell was steady in July from June at 45 for July, but is up from 37 days in July 2009 and down from 58 days in July 2008.
"Winter is traditionally a slow period for the property market, and agents are aware of many home owners preparing their properties for marketing in the Spring so an uplift in sales volumes can be expected," he said.
The breakdown of the values of the properties sold is 134 for NZ$1 million plus, 462 for NZ$600,000 - NZ$999,999, 1,084 for NZ$400,000 - NZ$599,999 and 2,731 under NZ$400,000.
Changes in the median price varied from district to district across the country with falls as high as 5% in five regions, and increases of up to 11% in the other seven when compared with the same month last year.
The largest rise in the median price is in Southland which is up more than 10.5% on the previous year and the largest fall in Central Otago Lakes was 4.9%.
Further falls in 'buyers market'
ASB Economist Jane Turner said the figures confirmed the housing market had been subdued during July with sales steady on a seasonally adjusted basis for the month at very low levels.
"House prices held up surprisingly well over the first half of 2010, given the weakness in demand during this time," Turner said.
"Given the weakened fundamentals for housing demand, including slowing population growth, rising interest rates and change in tax policy, we expect house prices will come under pressure over the second half of the year, falling around 3% over the next year," she said.
Turner said the median days to sell of 45 was above the historic average of 38 and pointed to further weakness in house prices over the next year.
"It is increasingly clear the market has shifted in favour of buyers. In addition, recent house listings data point to an increase in the total stock of houses available for sale (on a nationwide basis), which are now back at mid-2008 levels during which time house prices declined by almost 10%," she said, adding that weak net migration could trigger further weakness in the housing market.