House sales slip, prices climb
August saw a slowdown in the real estate industry with sales down 3.4 per cent on the previous month although prices continue their upward climb.
The drop in sales is for want of sellers, not buyers, and the restricted supply continues to put pressure on prices to rise.
During the month the national median price rose $5000 to $390,000 compared to the previous month, according to Real Estate Institute figures.
The national median price is now $10,000 below the record set in March 2013, though three-quarters of that rise was a result of price escalation in the Auckland market where the demand/supply imbalance is chronic.
Canterbury also saw strong price rises and together with Auckland accounted for 83.5 per cent of the increase in the median price between August 2012 and August 2013.
"Agents from around the country are reporting strong activity from first-home buyers moving to secure properties ahead of the Reserve Bank's LVR [low-deposit rule] changes," Real Estate Institute chief executive Helen O'Sullivan said.
"However, the reports suggest that this is occurring more in the regions, rather than in Auckland and Christchurch where we are seeing the greatest price pressure.
"Overall the real estate market remains active with sales volumes about in line with what we would normally expect for this time of year.
"There are, however, signs of a slowdown in the rate of sales-volume growth."
Agents were reporting potential sellers sitting on the sidelines waiting for prices to rise further, as well as to see what the fallout came from the Reserve Bank's lending restrictions, which will limit the number of low-deposit loans the banks can make.
"This uncertainty in the short-term is exacerbating the problem of supply, although there should be a traditional lift in properties for sale as Spring takes hold," O'Sullivan said.
Institute data showed there were 6548 unconditional residential sales in August, an 8.5 per cent increase on August 2012, but a fall of 3.4 per cent compared to July.
On a seasonally adjusted basis the volume of residential sales was down 0.6 per cent compared to July, and up 11.7 per cent compared to August 2012.
All but one region recorded increases in sales volume compared to August last year, with Northland recording an increase of 15.3 per cent, followed by Auckland with 12.6 per cent and Canterbury/Westland Lakes with 12.1 per cent.
Nine regions saw a drop in sales volume in August compared to July, with Waikato/Bay of Plenty and Southland both recording a decrease of 9.7 per cent, followed by Manawatu/Wanganui down 5.5 per cent and Nelson/Marlborough down 5.1 per cent.
Just how high prices have got is illustrated by the fact that nearly a quarter of all sales in the month were for homes which sold for $600,000 or more, and 5.6 per cent of homes sold did so for more than $1 million.
Houses took one day less to sell in August compared to July. It is now taking just 34 days to sell a home.
Properties were being snapped up fastest in Canterbury/Westland (28 days), followed by Auckland (29 days) and Wellington (40 days). Northland has the slowest time to sell of 72 days, followed by 71 in Southland and 65 in Central Otago Lakes.
Such is the competition to buy that over the past 10 years the median days to sell for the month of August has averaged 37 days across the country.
Just how hot the real estate market is running is demonstrated by the institute's Housing Price Index, which tracks median houses prices. It showed a national rise of 2.1 per cent in August alone, with Auckland showing a 6.5 per cent rise. Christchurch was up 1.8 per cent, and the North Island in total 1.2 per cent.
Over the past 12 months, the Auckland portion of the index showed a rise of 17.9 per cent, with the average for the North Island being 5.6 per cent and for the South Island 5.1 per cent.