The monthly sales statistics just released by the Real Estate Institute of NZ continue to show a subdued residential house market in Wellington North with a low number of homes selling in the last couple of months. August sales levels were the lowest since Aug 2008.
Both the Average Sale Price and the Median Sale Price graphs have moved in a slightly more positive direction over the last couple of months even though the general trend has been one of softening prices. This is in line with the rest of Wellington with Quotable Value reporting that house prices Wellington wide have slipped back by 2.7% compared with the previous months sales prices.
Jonnon Ingerson from QV says, “Wellington remains the only main centre where values continue to decline in recent months, dropping 1.8 percent since January, and now sitting 2.7 percent lower than the same time last year. Possible Public Sector restructuring remains a dampening factor in the property market”.
On the other side of the coin, the number of properties entering the market place up until recent weeks has been at very low levels. This has resulted in the average time to sell dropping over August from 42 days to around 31 days on average. The indication from this is that there are Spring buyers out looking but they aren’t finding much new entering the marketplace especially in the first home buyers market up to $400k. I have contact with a handful of motivated people wanting to purchase in this bracket and the refrain from them over the last couple of months has been that there isn’t much coming onto the market.
What is the call for the house market in September?
Anecdotally, it does appear that there are a few more For Sale signs popping up around the area and I have heard of a number of properties selling with multiple offers presented. But the chances are high that with distractions like the Rugby World Cup, and some financial clouds still on the global horizon creating sharemarket volatility and adding to general uncertainty, that the level of seller and buyer activity in September will continue to be low.
Where to for Interest Rates?
I believe Interest rates will stay low in the short term but there is continued talk that the Reserve Bank may put up the OCR before the end of the year. My opinion is that the weakness showing in the economy doesn’t warrant a rate rise. We need the stimulus that a low interest rate is providing to keep things from wavering too much. It will be interesting to see.
I would expect to see more properties entering the market place in the next few weeks as we move towards the usually busy house selling month of November.
In the latest from the Reserve Bank reported on goodreturns this afternoon, Alan Bollard kept interest rates on hold for now.
That’s despite Bollard acknowledging the New Zealand economy is performing relatively well with domestic activity surprising on the upside. However, the updated forecasts in his Monetary Policy Statement suggest Bollard now won’t start raising the official cash rate (OCR) from its current record low at 2.50% until March next year. He certainly made no mention of removing the “emergency” 50 basis point cut in the OCR made in March in response to the Christchurch earthquakes.
September 19 2011 03:31 pm | North Wgtn House Market Trends