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Why are Kiwi houses so pricey?
Reports of house sales falling away may be overstating the market slowdown, bank economists say.
Real Estate Institute data shows outside Auckland, turnover was down 3.3 per cent last month compared to the same time the year before. In Auckland, it dropped 2.1 per cent, year-on-year.
The 5506 properties sold was the lowest number for any September since 2011.
Northland’s turnover dropped 21.9 per cent, Gisborne 21.7 per cent, and West Coast 18.9 per cent. All of those regions recorded sales rates usually seen during the Christmas and January break.
“Traditionally there is a lag of about 6 weeks between significant movements in listings and sales results. With July’s listings down by 5.4 per cent year-on-year and an all-time low level of listings in seven regions, it’s little wonder that September’s sales volumes were so low. There simply weren’t as many properties for sale resulting in a very quiet start to spring,” chief executive Bindi Norwell said.
“However, with August and September’s listing numbers up 0.1 per cent and 11.7 per cent respectively, it is expected that October and November’s sales volumes will be much stronger – particularly as people want to sell ahead of Christmas.”
But Westpac chief economist Dominick Stephens said the Real Estate Institute data systematically understated the number of sales each month, because not all sales were immediately recorded.
Bindi Norwell expects the housing market to pick up again soon.
“Late-reported sales are added to the historical record after the data is initially released. For example, a month ago the REINZ reported that there had been 6216 house sales in August. Today that figure was revised to 6324. Today’s report of low sales in September will similarly be revised upwards.”
He said, after adjusting for that, and seasonally adjusting, the drop was more like 1.4 per cent compared to August and 1.8 per cent compared to September 2017. “Nothing to get excited about, really.”
He said he had predicted two months ago that a drop in fixed mortgage rates, and predicted loosening of loan-to-value restrictions, would lead to an improvement in the housing market and a period of rising prices later this year. It would then return to a negative trend.
Fixed rates had already dropped.
Dominick Stephens says the slowdown might not be as sharp as reported.
“It is early days yet, but we are now turning our eye to whether the drop in fixed mortgage rates is stimulating the housing market. On a nationwide basis there are no real signs of a reaction yet. There was an eclectic mix across the provinces, with some regions seeing rising prices and others seeing falling…………
Continue reading this article at the original source from Stuff.co.nz
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