House sales dive in city
Tuesday, 11 December 2007
The number of house sales has plummeted 25 per cent in Hamilton compared with this time last year as interest rate increases start to bite, real estate agents say.
The news comes as Quotable Value today released figures that showed the rate of increase in property prices in the Hamilton market continued to ease.
Values in the city increased by 14.5 per cent over the 12 months to the end of November, compared with 15.8 per cent in the year ending October this year. The average Hamilton house sale price is now $367,660.
QV's Richard Allen said fewer sales, higher interest rates and slowing Hamilton population growth were to blame.
Thames-Coromandel continues to have the most expensive average house sale prices in the region ($556,023), but the region's annual increase of 5.7 per cent is well below the national average. Waitomo prices have shot up 27.2 per cent in the past year, with the average sale price reaching $153,565. Tauranga's average price was now $439,084 on the back of annual growth of just 5.4 per cent.
While warmer weather had helped boost sales in recent weeks, the number was considerably down for the same period in 2006, said Ray White residential salesman Orlando Robbins. He said the main reason for the quieter market was simple: interest rates.
Figures from the Real Estate Institute of New Zealand show that in October 2006, 325 houses sold in Hamilton. In October this year the number was 244.
Mr Robbins said the repeated interest rate hikes earlier this year, combined with cautious first-home buyers, unrealistic vendors and investor buyers leaving the market, had all contributed to declining sales.
He said some house prices had dropped as a result.
"First-time buyers are far more cautious when they're making a buying decision and of course they're much more limited in the amount of money they can spend. So that has caused some downward pressure on prices."
The appearance that average house prices had risen was deceiving, Mr Robbins said.
"In fact the volume has gone down and within that volume the proportion of higher value properties (being sold) is larger, so the median price goes up."
Mr Robbins said mortgagee sales had "probably doubled" mostly because homeowners had over-extended themselves.
"Certainly we're doing a lot more mortgagee sales than we were."
He said the impact of the last interest rate increase in winter by the Reserve Bank had filtered through to those with "one-mortgage too many".
But Mr Robbins said it was not yet a buyers' market.
"In this market you have to have a willing vendor and a willing buyer. In other words the vendor has to come down a little bit and the buyer has to go up a little bit."
Many private sale vendors had enlisted the help of real estate agents when they realised how time-consuming and difficult it could be to sell, Mr Robbins said.
Hamilton-based Real Estate Institute president Murray Cleland confirmed the market had eased.
"I think we're probably seeing the effect of the increase in interest rates."
Mr Cleland said it was positive news for the industry that the official cash rate of 8.25 per cent remained unchanged when reviewed last week, after concerns Reserve Bank Governor Alan Bollard might have raised it.
"If there was a slight drop in interest rates I think you'd find that people would come back into the market."
But he added sales and prices in rural towns around the Waikato had held up well.
Today's QV figures showed nationally that property prices rose 11.4 per cent in the year to November, down from 12.7 per cent in the October year. The average national price in November was $393,198.
Tuesday, 11 December 2007
The number of house sales has plummeted 25 per cent in Hamilton compared with this time last year as interest rate increases start to bite, real estate agents say.
The news comes as Quotable Value today released figures that showed the rate of increase in property prices in the Hamilton market continued to ease.
Values in the city increased by 14.5 per cent over the 12 months to the end of November, compared with 15.8 per cent in the year ending October this year. The average Hamilton house sale price is now $367,660.
QV's Richard Allen said fewer sales, higher interest rates and slowing Hamilton population growth were to blame.
Thames-Coromandel continues to have the most expensive average house sale prices in the region ($556,023), but the region's annual increase of 5.7 per cent is well below the national average. Waitomo prices have shot up 27.2 per cent in the past year, with the average sale price reaching $153,565. Tauranga's average price was now $439,084 on the back of annual growth of just 5.4 per cent.
While warmer weather had helped boost sales in recent weeks, the number was considerably down for the same period in 2006, said Ray White residential salesman Orlando Robbins. He said the main reason for the quieter market was simple: interest rates.
Figures from the Real Estate Institute of New Zealand show that in October 2006, 325 houses sold in Hamilton. In October this year the number was 244.
Mr Robbins said the repeated interest rate hikes earlier this year, combined with cautious first-home buyers, unrealistic vendors and investor buyers leaving the market, had all contributed to declining sales.
He said some house prices had dropped as a result.
"First-time buyers are far more cautious when they're making a buying decision and of course they're much more limited in the amount of money they can spend. So that has caused some downward pressure on prices."
The appearance that average house prices had risen was deceiving, Mr Robbins said.
"In fact the volume has gone down and within that volume the proportion of higher value properties (being sold) is larger, so the median price goes up."
Mr Robbins said mortgagee sales had "probably doubled" mostly because homeowners had over-extended themselves.
"Certainly we're doing a lot more mortgagee sales than we were."
He said the impact of the last interest rate increase in winter by the Reserve Bank had filtered through to those with "one-mortgage too many".
But Mr Robbins said it was not yet a buyers' market.
"In this market you have to have a willing vendor and a willing buyer. In other words the vendor has to come down a little bit and the buyer has to go up a little bit."
Many private sale vendors had enlisted the help of real estate agents when they realised how time-consuming and difficult it could be to sell, Mr Robbins said.
Hamilton-based Real Estate Institute president Murray Cleland confirmed the market had eased.
"I think we're probably seeing the effect of the increase in interest rates."
Mr Cleland said it was positive news for the industry that the official cash rate of 8.25 per cent remained unchanged when reviewed last week, after concerns Reserve Bank Governor Alan Bollard might have raised it.
"If there was a slight drop in interest rates I think you'd find that people would come back into the market."
But he added sales and prices in rural towns around the Waikato had held up well.
Today's QV figures showed nationally that property prices rose 11.4 per cent in the year to November, down from 12.7 per cent in the October year. The average national price in November was $393,198.