House sales jump 16% in August – Auckland, Christchurch lead

BUSINESSDESK: New Zealand home sales climbed 16% in August as the property market recovers from 2011's lows on the continued strength of the Auckland and Christchurch property markets.

The number of sales rose by 843 to 6,035 in August compared to the same month a year earlier and was up 2.2% on July. The increase was led by an 18.4% increase in the number of auctions to 588, a new record for the month.

The national median house sale price gained 2.5% to $370,000 compared to July and is up 4.2% on August last year.

Auckland's median house price reached a new record, rising 1.1% to $505,500. The Canterbury region also reached a new record, with the median rising to $345,000 from $325,000 a year earlier.

"House buyers in Auckland are increasingly driving the New Zealand real estate market with a widening gap opening up between the dynamics of the Auckland market and the rest of the country," Real Estate Institute chief executive Helen O'Sullivan says.

"While Auckland and Christchurch recorded new record median prices during the month it is the strong sales volume growth in Auckland that is most notable.

"Across the rest of the country while we are continuing to see rising sales volumes, prices continue to reflect the general caution around the economic outlook," she says.

"In many parts of the country we are also seeing shortages of houses available for sale, often a market feature at the end of winter, although expectations for a rush of listings in the spring are not strong."

All regions recorded an increase in sales volumes compared to August last year. Northland led the way, up 31%, followed by Auckland on 25.6% and Taranaki on 22.2%.

Seven regions recorded an increase in sales last month compared to July, with Central Otago Lakes up 25%, Southland increasing 11.2% and Nelson/Marlborough up 8.9%. Taranaki bucked the trend, falling 14%, while Manawatu/Wanganui fell 8.2%.

"This increased level of activity does need to be seen in context of an overall housing market that is still subdued and with prices yet to catch up with increases in the consumer price index over the last five years," Ms O'Sullivan says.

"A sure sign that housing market was back to normal levels of activity would be turnover reaching the pre-2008 long run average. This has yet to happen."

Nelson/Marlborough recorded the highest lift in prices, up 11.6% to $330,000.

The number of days to sell a house fell to 35 from 38 in July. That is down four days on the same period a year earlier. Auckland recorded the shortest number of days to sell with 30, followed by Canterbury/Westland on 33 and Otago on 37.

The total value of residential sales across the country was $2.79 billion, compared to $2.62 billion in July and $2.18 billion in August 2011.