Home sales jumped 37% in February, but listings lag

BUSINESSDESK: New Zealand home sales jumped 37 percent in February as the property market continues to recover, though a shortage of listings is still holding back prices.

The number of sales rose to 6,168 from 4,502 in the same month a year earlier, and was up from 4,073 transactions in January, according to Real Estate Institute figures. The national median house price was up 1.4 percent to $355,000 from a year ago, though unchanged from January.

“While agents are seeing more activity and more positive sentiment from buyers in most places, this is not translating into significant price increases,” chief executive Helen O’Sullivan said. “Agents in a number of areas continue to report listing shortages.”

The property market has been slowly recovering in recent months after an extended lull as households eschewed taking on new debt to finance a new house and instead repaid existing loans.

ASB economist Jane Turner said the “steady recovery seen over recent months suggests that underlying household sentiment has continued to improve.”

“We expect further recovery in the labour market over 2012 to continue to support further growth in housing demand, although this will be tempered by weak net migration in the near term,” she said.

The figures come just ahead of Quotable Value data, which has been showing improving property values, underpinned by Auckland. Last week, the Reserve Bank said property values are still about 13 percent below the peak in 2007 in real terms.

The REINZ stratified house price index, which strips out monthly variance in proportion to high or low value housing, rose 0.8 percent to 3,280.5 last month, and is up 2.7 percent on an annual basis. The index is 3 percent below the peak.

The national median days to sell rose by one day to 46 from January, but was down from 58 days a year ago.

O’Sullivan said even with the increased number of transactions, “buyers are remaining cautious with the days to sell measure down by just one day, and still above the long-term average.”

In Auckland, the median house price rose 0.6 percent to $468,000 from a year earlier, with the number sold up 30 percent to 2,075 in February.

Wellington house prices fell 5 percent to $388,000 from January 2011, while the number of houses sold climbed 23 percent to 683.

Christchurch sale prices rose 7.73 percent to $350,000 and the number of houses sold more than doubled to 508.

Dunedin house prices gained 5.5 percent to an average $258,500, while the number sold fell 4 percent to 170 in February.