NZ Housing – Sales and prices continue to weaken
January’s Real Institute of New Zealand (REINZ) data confirms that the residential housing market continues to weaken. REINZ’s figures, which are more comprehensive and timely than the Barfoot & Thomson and Quotable Value data released in recent days, show that there were only 5,186 nationwide sales in January compared with 7,566 in January 2007. Sales volume began to fall, on a year on year basis, in May last year and the decline has exceeded 30% in three of the last five months. Total NZ Dwelling Sales 2008 Change 2007 Change 2006 2005 2004 2003 Jan 5,186 (31.5%) 7,566 +19.0% 6,360 7,071 8,382 8,157 Feb 9,357 +18.0% 7,930 10,145 9,859 9,643 Mar 10,989 +8.9% 10,094 10,406 11,378 10,745 Apr 8,194 +8.2% 7,576 8,875 9,609 9,014 May 9,285 (3.7%) 9,642 9,280 9,416 11,158 Jun 7,474 (11.3%) 8,428 8,025 8,425 9,789 Jul 6,660 (10.9%) 7,474 8,135 7,812 10,150 Aug 6,394 (25.3%) 8,556 8,591 8,143 10,222 Sep 5,894 (31.9%) 8,658 9,186 7,855 10,686 Oct 6,854 (22.6%) 8,857 8,513 8,191 10,923 Nov 7,837 (21.6%) 9,990 9,357 9,474 10,774 Dec 5,597 (32.1%) 8,245 6,906 8,546 8,669 Median NZ Dwelling Sale Price 2008 Change 2007 Change 2006 2005 2004 2003 Jan 340,000 +4.0% 327,000 +9.0% 300,000 265,000 229,000 193,100 Feb 335,000 +13.6% 295,000 270,000 231,000 195,000 Mar 343,500 +13.7% 302,000 280,500 240,000 200,000 Apr 349,000 +14.4% 305,000 272,000 242,000 203,000 May 350,000 +14.7% 305,000 275,000 248,000 210,000 Jun 347,500 +12.1% 310,000 284,500 243,000 210,000 Jul 345,000 +10.4% 312,500 282,000 249,000 212,000 Aug 350,000 +12.9% 310,000 290,000 248,000 215,000 Sep 351,500 +12.3% 313,000 290,000 250,000 215,000 Oct 350,000 +8.0% 324,000 295,000 252,500 227,000 Nov 352,000 +6.7% 330,000 300,000 260,000 235,000 Dec 345,000 +4.5% 330,000 295,000 260,000 228,500 Brian Gaynor, 13 February 2008
Prices usually lag sales volume by a few months and this trend is clearly evident in recent months. Prices flattened out in the August to November period and the median price has now fallen from an all time high of $352,000 in November to $340,000 in January. The median price will probably decline on a year on year basis from March onwards.
Retail spending will be effected by the negative wealth impact of a weak housing market but it reduces the prospects of further Reserve Bank interest rate hikes.
