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Bayleys Research


APRIL BULLETIN 2008

APRIL 2008

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UP AND DOWN IN THE RESIDENTIAL MARKET

Residential values are dropping in some areas as the market moves through uncertain times according to the February 2008 data released by the Real Estate Institute of New Zealand (REINZ). There was a slightly further fall in the overall residential values of 0.75% to $337,500 from the January 2008 figures, leaving it just 0.7% ahead of the February 2007 national median value. While the overall figure is down, the regional figure shows an even split with six of the twelve regions monitored by REINZ recording increases over the January median sales values. The remaining six experienced a fall in values of between 0.75% and 7.5% compared with January 2008.

 

 

National sales volumes clawed their way back up from the record five-year low in January, increasing 22% to sit at 6,356 transactions in February 2008. The current volume is, however, a significant contraction from the February 2007 level of 9,357 transactions.

The National Bank’s assessment of the market is that “there is a standard 9 year pattern in the property market - five years of boom, a dip and then sideways. We are entering the dip”. The global credit crunch is hitting hard at mortgage holders’ pockets as they roll off 2-3 year fixed rates and are then faced with double digit floating interest rates regardless of the Official Cash Rate remaining unchanged at 8.25% in the March 2008 review. Households are feeling the pinch with no signs of interest rate relief expected until later in 2008 alongside increased costs in other areas such as petrol and rates. This is reflected in the latest One News Colmar Brunton poll which shows consumer confidence has plummeted.

The national median days to sell figure crept up to 50 days in February 2008 up from 32 days a year earlier. This is not unexpected in a slowing market as the volume of property coming onto the market exceeds the number selling. Vendors who must sell are having to adjust their price expectations to meet the market.

 

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