House prices fall, volume rises

By Phil Boeyen, ShareChat Business News Editor

Tuesday 19th February 2002

The median price for a New Zealand residential property price fell by $3,000 in January compared with the previous month but the number of sales increased.

The Real Estate Institute reports that median prices eased nationally from $178,000 in December to $175,000 for January 2002, but have held up on a year-to-year basis and are at the same level as last year.

The total number of houses sold reached 6,771 in January, up from 6,147 in December and much higher than last January's total of 4,741.

Institute president, Rex Hadley, says the increased sales volume is very encouraging and bodes well for the rest of the year.

"What these figures are telling us is that market liquidity has improved, people are finding it much easier to transact residential property and are perhaps not as fixed in their pricing attitudes as they are in tighter economic times when medians can hold up but volumes tend to fall considerably."

Mr Hadley says continued low interest rates and a very competitive mortgage market were obviously contributing factors to the more buoyant market.

"We are also pleased that the much higher volumes are not translating into sharp price increases which indicates that people are taking a more mature approach to residential property and that the heated environment in areas like Auckland in the mid 1990s is not likely to be repeated.

"We suspect that the low interest rates are encouraging people to reduce their mortgages which is what they should be doing."

While medians slipped in the main centres generally on both a month-to-month and annual basis there were exceptions in some smaller provinces such as Nelson/Marlborough, where the median price rose from $147,500 in December to $158,000 in January.

Southland was also notable with turnover almost doubling at 299 sales compared with 157 in January last year and the median price rising to $80,000 from $78,500 in December. However the price is still well below the January 2001 median of $106,000.

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