House prices are barely rising, so no need to pawn off any rings just yet.
With Realestate.co.nz’s head guru Alistair Helm out of the country last week, there has been much thumb twiddling while waiting for their NZ Property Report to be released. Once it was, I tried squeezing so many Mars and Olympic puns into it Tongariro tried to end the pain and blow itself up.
Sorry. But hey, don’t say we didn’t warn you.
So here’s a quick pun-free look at the always excellent NZ Property Report and other bits of real estate data for July.
The big news was the number of new listings. While there were fewer than last month, the 9411 new houses on the market represents a 5% jump on this time last year. This led to an increase from 29.8 weeks of inventory to 31, still well below the long-term average of 40. Winter is the quietest time of year for the real estate market, but the call for more listings has been ongoing and sellers are responding – and that’s good news for house buyers.
Nowhere is this more needed than those eternally heated markets, Auckland and Canterbury. With just 19 and 18 weeks inventory respectively, they remain strong sellers’ markets. Auckland had 10% more listings last month than July 2011 – and yet inventory is still 25% down for the same period. Expert diagnosis: people really like living in Auckland.
Meantime, the asking price rose just 0.8% to $429,181. Sitting well above the national mean is Auckland (up 3% to $574,932) and Central Otago/Lakes (down 2.1% to $505, 294). Canterbury only rose 0.9%, but this was still enough to hit a new record of $393,433.
So what does the immediate future hold for house prices? Likely more of the same. With inflation low, and the exchange rate high, the Reserve Bank has no appetite to raise the Official Cash Rate. Dominick Stephens of Westpac, taking over goatee duties from Bernard Hickey, reckons we may have to wait until at least July 2013 for that.
Our Aussie counterparts yesterday left their cash rate at 3.5%, following four drops since November. Simply, there is no clamour in our region for a raise.
Banks are therefore not particularly bothered about putting up mortgage rates; in fact, on Monday, Westpac dropped theirs to 4.99% for those with more than 20% to deposit.
So while they say it’s a sellers’ market – and they’d be right – there is still plenty in there to keep buyers interested. And interested they are. Before anyone tells you there’s a bubble, however, consider this: mortgage debt, according to the Reserve Bank, increased just 1.8% in the year to June (click on ‘Historical data’ in that link). Compare this with the big boom of last decade, where we regularly saw annual increases of between 15-17 percent, and you can see people are now being far more sensible about taking on more debt.
Whether you’re thinking of buying or selling, it’s not a bad time to be in the market. So let your Curiosity get the better of you, give your local agent or broker a ring, rove around those Open Homes and go for gold. Sorry.