House prices lose fizz in April

By NZPA

Wednesday 18th May 2005

Some of the fizz left the residential property market in April with house prices easing 3% during the month and sales dropping "significantly" according to the Real Estate Institute of New Zealand (Reinz).

Institute figures released today showed the national median house price dipped to $272,000 in April from the record $280,000 hit the month before but remained above the April 2004 figure of $242,000.

Reinz national president Howard Morley said April was a "traditionally" soft month for the market, however, the dip in median price was accompanied by "a significant reduction" in sales from 10,398 in March to 8876 in April - the lowest number of sales for an April month since 2001.

But Morley downplayed the significance of the softer data saying the lower April median "needs to be seen against the particularly sharp jump from February, when the median was $269,200, to $280,000 in March".

"April is always a quieter month and activity usually falls sharply, whereas March is always a strong month which has been the seasonal pattern for many years."

He said some median prices in the regions had been reduced by particularly low sales volumes reflecting a fall in the number of properties being offered for sale.

"This is witnessed by the fact that the national days to sell figure is unchanged at 28 days, suggesting there has been little overall fall in confidence in the market, despite rising interest rates - simply a reduced level of activity."

The Taranaki region experience the biggest apparent fall in house prices with its median tumbling from $220,000 in March to $162,637 in April.

Taranaki's big drop in sales volume for the month after a period of strong growth "suggested the price reduction was more likely to be a reflection of a swing from more expensive property sales to lower priced properties," Morley said.

Prices also fell sharply in Wellington where the April median was $275,000 from $289,000 in March and Nelson/Marlborough where prices declined $18,000 to $269,000.

Other significant contributors to the lower national median price included Northland where prices fell $10,000 to $230,000, Auckland which eased $3000 to $369,000, Waikato/Bay of Plenty/Gisborne - down $4000 to $244,000 and Hawke's Bay down $10,000 to $230,000.

Manawatu/Wanganui was the only region to hold its ground with an unchanged median of $155,000.

Canterbury/Westland's median price fell $7000 to $242,000, Otago's eased $2900 to $216,100 and Southland's fell $2500 to $144,500.

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