Optimism as house sales rise

More houses are being sold and a shortage of property for sale is frustrating would-be buyers.

"Our valuers are reporting signs of increased buyer activity in the market, with more people attending open homes and more sales occurring," says Blue Hancock of QV Valuations.

"This is a continuation of the increased activity in February, but also typical of March, traditionally the month when most sales occur."

QV Auckland valuer Glenda Whitehead reports more houses have sold and fewer are being listed.

The latest QV figures, regarded as the most reliable indicator of property values, show the rate of decline slowed last month for coastal North Shore areas.

Prices had been down 11.3 percent in the year to February, but this improved to 10 percent in the year to March.

Across the whole of the Shore, prices were down 9.9 percent on a year earlier.

North Harbour prices were down by 6.9 percent, among the lowest falls in New Zealand, while the Onewa region saw prices fall by 10.7 percent.

The average sale price for the North Shore was $613,117, the highest in New Zealand.

Harcourts managing director Marty Scott says the number of houses on its books has dropped by 30 percent and he suspects most real estate companies are in the same position.

Agents have a raft of unsatisfied buyers and he says that might suggest "some resilience around prices".

Sales volumes have increased in recent months, which Mr Scott says is a pleasant surprise given the magnitude of negative sentiment and gloomy forecasting in the economy and business circles. Most sales are below $600,000, he says.

"It tends to be at the interest-rate sensitive end. Rents are going up, affordability is better than what it has been, it’s been a good time for people to buy."

The focus on interest rates, with Reserve Bank governor Alan Bollard cautioning banks not to put them up too fast, indicates the low point for rates is close.

Real Estate Institute president Mike Elford says while the figures in terms of sales volumes, prices and days to sell are cause for "cautious optimism" it is too early to predict recovery.

In an opinion column, BNZ economist Tony Alexander says it will be interesting to see how prices go this year as an existing housing shortage combined with the worst construction levels in living memory run up against accelerating population growth.

"If I were looking to make a canny purchase in the housing market whether as an investor or owner-occupier I would do it before the middle of this year."

- © Fairfax NZ News