Sales down, prices up
Monday 20 February 2006
The residential property market struggled through January in low gear but prices mostly held up, according to the Real Estate Institute of New Zealand (REINZ).
The market appeared at first sight to take some heed from the Reserve Bank’s recent warnings, with a drop in sales, but January sales traditionally dip according to REINZ, and the national median price was back up to its November high of $300,000 after having slipped back to $295,000 in December.
REINZ national president Howard Morley said the low level of activity while traditional for January was historically low – the lowest January sales since 2001.
Sales fell from 6906 in December to 6360 in January, well down on the January 2005 figure of 7071.
“The market is definitely a lot more sluggish than at the end of last year. However how much of that is attributable to the holiday break and how much is to do with rising interest rates is hard to say.”
Morley said February and March would give a truer picture of where the market was likely to head in 2006.
Commenting is closed
House prices may start to taper off in the coming years as supply finally starts to meet demand - but no one should be holding out for a huge price correction.
Booming commercial property sector could offer alternatives to investors worried about what lies ahead for the residential property market.
The Reserve Bank says more official cash rate cuts are likely as it fights to get inflation into its target range.