According to the latest National Bank Property Focus report, the real estate market has hit a plateau.The volume of residential property transacted each month weakened for the third month in a row in December.According to the Real Estate Institute of New
According to the latest National Bank Property Focus report, the real estate market has hit a plateau.
The volume of residential property transacted each month weakened for the third month in a row in December.
According to the Real Estate Institute of New Zealand only 4,957 houses sold in the final month of last year compared to 6,056 in November and 6,091 in October.
But the prices achieved increased during that period, up to a national median average of $360,000 in December from $355,000 in October and November, compared to only $325,000 in January last year.
In December 2008 the average price was $328,500 and in the same month in 2007 it was $345,000.
Another reason National Bank said the market has hit a plateau is because the number of days it took to sell each property is at the highest level seen in six months at 33 days.
As the bank said in its report, this is still low. In January last year it was taking an average of 59 days to sell a house. This dropped to 44 in March and was down to 37 by July.
“The most recent reading of the real estate market looks as though activity has plateaued and is turning down,” said the National Bank in its report.
“Sales volumes are down, the median days to sell is rising (but still low to be fair) and (although we are loathe to read too much into it) sale prices have plateaued after a strong surge.”
The bank said the number of home loans approved towards the end of 2009 was lower than the same time one year earlier, with lending “running behind last year’s dismal level”.
“All up, the property market did its job helping to stabilise the economy in 2009: it responded to policy support. But it is not kicking on, and we expect more of the same as a new normal prevails,” the bank said in its report.
This sentiment was echoed by Bayleys real estate agency managing director Mike Bayley who said that while the New Zealand economy would continue to return to health throughout 2010, house prices will only increase slightly.
