New Zealand house sales fell in July as winter cooled the appetite of house hunters while a drop in properties selling for $400,000 or below likely reflected the Reserve Bank’s moves to cool the market.
Sales fell 13 percent in July from the same month of 2013 to 5,893, but were up 2.3 percent from June, according to the Real Estate Institute of New Zealand. The national median price rose $31,000, or 8.1 percent from a year earlier, to $416,000 and was about 2.6 percent lower than in June.
Last October the central bank introduced restrictions on high loan-to-value mortgages to take the steam out of the housing market in Auckland and Christchurch which it said could stoke inflation. Since then governor Graeme Wheeler has embarked on a tightening cycle, starting in March, which has lifted the official cash rate to 3.5 percent.
“Reports on the effects of the LVR restrictions continue, particularly from the regions, where the reported lack of able buyers is filtering up the price points and on to vendor behaviour,” REINZ chief executive Helen O’Sullivan said in a statement.
“It is worth nothing that Auckland and Canterbury/Westland accounted for more than 100 percent of the increase in the national median price between July this year and July last year, a further indication that the ‘national price’ is being driven by these two regions alone,” she said.
“Rising interest rates and the forthcoming election are probably also influencing buyer behaviour,” O’Sullivan said.
The number of sales below $400,000 fell by 22 percent in July, from a year earlier, following a 17 percent drop recorded in June. Sales between $400,000 and $599,999 fell 8.6 percent from a year earlier, while sales between $600,000 and $999,999 edged up 0.2 percent and $1 million-plus sales rose 9.4 percent.
The number of days to sell rose by two to 37 in July, compared to a year earlier, and was two days shorter than in June.
“Sales volumes picked up a little in July compared to last month but this about in line with the normal seasonal pattern,” O’Sullivan said.
The stratified median housing price index fell 0.7 percent from June.
In Auckland, prices rose 0.7 percent on that measure, the Christchurch index increased 3.5 percent and the Wellington index advanced 2.1 percent. Over the year the national index increased 5.9 percent, compared to July last year, with the Auckland index up 12.2 percent, the Christchurch index rising 13.9 percent and the Wellington index declining 2.3 percent.
The total value of residential sales, including sections, was $3.06 billion in July, compared to $3.31 billion a year earlier and $3.08 billion in June. For the 12 months ended June 30 the total value of residential sales was $39.34 billion.