More good news for home buyers

The pendulum swung further in home buyers' favour last month as the number of houses sold remained at record lows.

Just 5029 homes were sold last month, the lowest February sales figure since the Real Estate Institute started compiling statistics in 1992.

This was the second month in a row sales were at record lows, with the 3666 homes sold in January being lower than any other January in the REINZ database. Prices overall were flat, but down from the recent highs at the end of last year. The national median was $350,000 in January and February, compared with $360,000 in December.

However, the main concern for vendors will be the flood of new listings coming on to the market at a time when sales levels are so low.

Alistair Helm, chief executive of property website Realestate.co.nz, said just over 15,000 additional homes were listed for sale on his website last month, equivalent to three months' sales at current levels. Unless there was a significant increase in sales, there would be a huge oversupply of unsold stock on the market, which would be likely to depress prices going in to winter.

Last week the Sunday Star-Times revealed the growing mountain of unsold homes, and its implications for falling prices over the next few months, something that now appears even more likely after last week's release of February's sales figures.

Helm said it was surprising that sales remained so low in February because it was usually one of the busiest months of the year.

The burgeoning supply of homes for sale is affecting the length of time it takes to achieve a sale, as buyers become more fussy and take their time.

According to the REINZ figures, the median number of days it took to sell had increased by nearly 50% over the last five months, rising from 31 days in October to 46 days in February.

Helm said current sales levels were not bright news, and if they continued at current levels it would take nearly a year to clear all of the homes listed for sale on Realestate.co.nz.

- © Fairfax NZ News