By Bernard Hickey
The Real Estate Institute of New Zealand has reported there were 6,168 houses sold in February, which was up 51% from volumes sold in January and up 37% from February 2011.
This was the strongest February for sales since February 2008, when house prices peaked nationally. The REINZ noted, however, that the sales in February remained below the 9,357 sales see in February 2007 and the record 10,145 seen in February 2005.
REINZ said volumes were up 3% in seasonally adjusted terms in February from January.
“While agents are seeing more activity and more positive sentiment from buyers in most places, this is not translating into significant price increases," said REINZ Chief Executive Helen O’Sullivan
"Agents in a number of areas continue to report listing shortages. Despite the increased number of transactions, buyers are remaining cautious with the days to sell measure down by just one day (to 46 days), and still above the long term average (41 days).”
REINZ said the median price was unchanged at NZ$355,00 in February from January, but was up 1.4% from February a year ago.
QV says national values up 2.9% over past year, Auckland up 4.8%
Meanwhile, government owned valuer Quotable Value (QV) said nationwide residential property values continued to gradually increase through February. Values rose 1.1% over the past three months, 2.9% up over the past year, and are now 2.9% below the previous market peak of late 2007, QV said. It said the national average sale price over the past three months was NZ$408,669.
QV research director Jonno Ingerson said the Auckland area was still the fastest growing of the main centres, up 1.7% over the past three months and 4.8% up over the past year.
"Values are now above the previous market peak by 2.3%. This increase across Auckland is being led by the old Auckland City which has increased in value by 6.5% over the past year and is 5.1% above the 2007 market peak," said Ingerson.
REINZ said the numbers of days to sell in Canterbury/Westland fell four days to 35 days, which was the shortest time nationally. Northland had the longest time at 71 days.
REINZ said there were 686 dwellings sold by auction in February representing 11.1% of all sales, up from 393 sales or 8.7% in February 2011.
It said Auckland dominated the auction market, representing 63.7% of the national total of auction sales, with 21.1% of all sales in Auckland by auction.
Canterbury/Westland accounted for 9.6% of the national total of auction transactions, and all other regions combined accounted for the remaining 11.0% of auction sales.
The stratified REINZ Housing Price Index, which is prepared using a Reserve Bank methodology that strips out the skew caused by more or less sales in some price brackets than others, increased 0.8% in February from January. The national index was up 2.7% in February from a year ago, but is 3.0% below the peak seen in November 2007.
The REINZ Housing Price Index recorded falls in Wellington (down 2.4% from January), Other North Island (down 0.4%) and Sections (down 5.5%).
Increases were recorded in Auckland (up 4.6%), Christchurch (up 2.0%) and Other South Island (up 0.2%).
The stratified Auckland Price Index however is 0.7% above the previous peak recorded in July 2007 and is up 8.7% from a year ago.
ASB's Turner comments
ASB economist Jane Turner said housing turnover continued to gradually recover. ASB estimated there had been an 8% lift in volumes in seasonally adjusted terms.
"The overall activity remains relatively subdued," Turner said.
"Nonetheless, the steady recovery seen over recent months suggests that underlying household sentiment has continued to improve," she said.
"We expect further recovery in the labour market over 2012 to continue to support further growth in housing demand, although this will be tempered by weak net migration in the near term."
Turner said the REINZ national figures masked stark regional divergences in housing market conditions.
"Agency listings data have shown supply is very low, particularly in Auckland, which has led to a very tight housing market conditions and upward pressure on prices," she said.
"The Canterbury housing market is also comparatively tight, with ongoing seismic activity delaying the rebuild, and it is not surprising to see the region’s stratified house price index is up 5.3% on year-ago levels."
Turner said the pick up in house prices and activity was consistent with some of the robust strength apparent in the underlying trend of retail spending.
"These recent developments have led the RBNZ to revise up its view of consumer demand at the most recent Monetary Policy Statement. House price increases in Auckland and Christchurch continue to outpace those of the rest of the country, largely reflecting supply constraints," she said.
"Under-building over recent years, combined with the housing shortage created by the earthquakes, has resulted in a very tight housing market in Auckland and Canterbury. We expect house prices will continue to lift in these regions over the near term. However, as rebuilding starts to pick up in earnest in Christchurch, the increase in housing supply should help alleviate some of the upward pressure on house prices."
However, Turner expected the Reserve Bank to leave the cash rate unchanged until December 2012 because it was very concerned about the high New Zealand dollar.
'Current rate of value increase very modest,' says Ingerson
Meanwhile, Ingerson said although national values are up 2.9% over the past year, this should be compared to previous periods of value growth.
"During 1993 to 1997 values increased between 8% and 14% per year. Then in the 2002 to 2007 boom values generally increased by 10% to 15% per year, and increased by a staggering 25% during 2003 alone," said Ingerson.
"In comparison the current rate of value increase is very modest and in inflation adjusted terms is only just above level."
He said although there had been a noticeable increase in market activity over the past month, this is typical for the time of the year.
"While this level of activity may be higher than the last few years, it is still below long term average. There is still a shortage of properties for sale in some areas, and in general buyers are acting cautiously and carefully," said Ingerson.
See our interactive chart of house sales volumes below.
(Updated with QV, links, details, interactive chart, ASB comments)