Housing market accelerates in March quarter

A PCI value of -10 shows a strong housing market downturn, while +10 shows a strong upturn. As in the December quarter, the Auckland district led the way with a PCI index of 8.08, its best level since 2002. The Wellington district also showed strength with a PCI of 7.77, with house price inflation at 17%, its highest level since mid-2004.
 
Houses in the March quarter spent six fewer days on the market that a year earlier: the biggest annual reduction in the time taken to sell in more than three years.
 
The number of houses sold rose 15% in the March quarter, the highest rate of growth since 2003.  
 
Nationally, the PCI rebounded to 4.24 in March from -2.71 in the December quarter. All three indicators – sales, prices, days to sell – started the year strongly although data for the month of March suggests that sales growth may have peaked.
 
All areas expect Nelson/Marlborough showed growth in the March quarter.
 
Fixed mortgage rates, however, rose significantly in March and April, which is expected to reduce buyer demand for the rest of the year. Mortgage rates are now at their highest levels since 1998.
 
Summary of the main markets:
Auckland: momentum is the best since 2002 with sales growth, house price inflation and the days taken to sell all showing substantial improvement in the March quarter. Weak net migration in early 2007 means it is unlikely for this burst of activity to continue throughout the year.
 
Wellington: house price inflation hit 17%, its highest level since mid-2004. The time taken to sell is second only to Southland, with properties spending on average only 22 days on the market. A shortage of houses for sale is likely to support price growth in the coming months.
 
Canterbury/Westland: the PCI edged into the positive after ten quarters of negative figures. House price growth at 11% was the highest for a year with properties taking six days fewer to sell than a year earlier. A slow-down in the number of houses sold, however, may be an early sign of renewed softness in the Canterbury/Westland market.