Housing market sales and prices revived in January

Real Estate Institute chief executive Bindi Norwell says hot weather warms the housing market.

The housing market revived in the traditionally quiet month of January with year-on-year sales volumes lifting for the first time since June 2016.

The Real Estate Institute’s latest data shows there were 4366 homes sold in January, 2.7% more than the 4251 sold in January last year.

Prices are also on the move again with the house price index up 3.4% on a year ago nationwide, although prices in Auckland were up a scant 0.1%.

Excluding Auckland, the annual increase was 6.6%.

The hot spots were Gisborne and Hawkes Bay, up 13.7% on January last year, Southland, up 13.2% and Manawatu/Wanganui, up 11.6%, but no district experienced an annual decline.

Prices in Wellington were up 8% on January last year, up 7.6% in the Waikato and up just 0.2% in Canterbury.

“January can often be a quiet month for the industry as people spend much of their time at the beach or the bach,” says institute chief executive Bindi Norwell.

“However, clearly the warmer weather has helped sales as it’s the first time we’ve seen a positive year-on-year sales increase in 19 months." Ms Norwell.

The institute says auctions were used in 6% of all sales, the same as in January last year, although Auckland saw a 4.4% increase.

More very expensive houses and fewer cheaper houses were sold in the latest month.

Houses worth more than $1 million accounted for 11.4% of sales in January this year compared with 10.5% in January last year.

And 47.3% of sales were of houses worth less than $500,000, down from 51.4% last year.

Days to sell lengthens
Despite the greater sales volume, it’s taking longer to sell houses.

Nationally, it took five more days at 46 days to sell a house in January this year than in the previous January.

Westpac chief economist Dominick Stephens says the housing market figures can be choppy on a month-to-month basis, particularly around the holiday season so he isn’t reading much into the latest numbers.

“The housing market is still best characterised as enjoying a bit of a resurgence at present following a drop in mortgage rates in late 2017 and the passing of the election,” Mr Stephens says.

“With fixed mortgage rates falling further in recent weeks, and the Reserve Bank slightly easing its loan-to-valuation mortgage lending restrictions, we expect the current market buoyancy to continue for a few more months,” he says.

“However, later this year we would expect fixed mortgage rates to start increasing and the government’s policy programme of cooling the housing market will bear on the market.”

ASB economist Kim Mundy agrees. “Although election uncertainty has eased, the housing market is still facing a number of disruptions from legislative changes which we think will continue to weigh on activity and price growth over 2018.”


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46 days to sell according to REINZ. Pretty bearish, hasn't been that high since 2012!

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What options do New Zealanders have for investment? Shares in NZ companies like GeoOp?

Property value historically doubles every decade.

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Its difficult to know where to put your investment these days. Most things look like a hot potato to me.

Cash may be king, but first mortgages not greater than 60% on good real estate are better.

The Banksters are largely in control of the cycles, and we are heading to a down cycle if not already. Economies can only absorb so much debt; and Japan will tell you that.

NZ's lifestyles have largely been funded by borrowings since National took office. Increased government debt of $80 billion and increased private debt of $200 billion; more than double from previous debt levels. What people forget is debt eventually has to be paid back, but that wasn't a concern to Key who now has a plumb job for the extra business he generated.

While property values may have doubled every decade, every household now requires two workers to fund mortgages that are at historically low interest rates. The only driver left to keep this party going is population increase (of well off people, rather than peasants), but we quickly worked out that comes with a cost the Nation cant afford without more debt or costly rent to buy schemes (PPP'S).

Don't bet on house prices doubling this next decade. It might he lucky to keep its present value if you start praying. There will be exceptions, but few which are likely to be the product of enterprise.

Best bet would to be invest in a sustainable future, and businesses that are in that game.

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Falls on the way due to bad weather.

Bumping times ahead.

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Record Low interest rates just get lower as the doomers hide back in the woodwork.

The major banks will release the handbrake and excessive pent up demand will double the house prices in Auckland.

Remeber the GFC in 2007 and doubling house prices in 2015.

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who is going to be able to afford higher prices? lol

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The US Fed unwinding quantative easing and Trump's tax cuts forcing the US to borrow more. Gonna increase the price the US has to pay for more debt. And in turn, the price NZ has to pay to borrow.

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Labours housing policy forces us out of housing to living in cars !

Labour punishes people that buy sell and rent housing.

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True that - we are planning on moving this year and were going to buy somewhere reasonable and rent out our current place. But there is no way that the current house will comply with all of the new rental requirements - especially given its age - and then the tax rules, anti-landlord legislation etc mean that renting houses is a mugs game.

Instead we will sell it and buy something bigger than we planned to and in a better neighbourhood. Effectively our property investment will be concentrated into capital gains and enjoyment of our family home rather than diversified across a number of properties.

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