The elevated Napier house sales volume seen in February continued in March 2015 with 104 sales. However, the average turnover over the past year is still 18% below the previous 12 months. A sustained improvement of over 95 sales per month will be necessary to suggest a turn in the market.
This recovery appears to have been led by an increasing number of active first home buyers, encouraged by an easing in interest rates and softening lending constraints. New Kiwisaver rules for settlements after 1st April 2015 are enabling larger KiwiSaver withdrawals for first home purchases.
As a result the number of homes sold under $300,000 price bracket lifted significantly in February and March 2015. During these two months sales in the sector accounted for 52% of the total sales compared with 45% over the preceding year.
A potential obstacle to the high turnover continuing may be the availability of well located, well-priced properties available for sale. Given the current strength of demand, for the first time since September 2013 the available stock has eased back to below 6 months’ supply. This is helping the market rebalance a little in favour of sellers.
Prices have remained stable during the past year, however if demand remains strong, this may lead to small improvements in some localities where housing supply is relatively low. The Quotable Value monthly index for March 2015 is showing a small improvement of 1.2%, while the less volatile quarterly index indicates that current prices are around 2% below the 2007/2008 market peak.
In a recent speech, the Reserve Bank called for more policy measures to manage imbalances in the housing market between the rampant Auckland market and regional New Zealand. But the Bank noted that their current measures are having limited effect compared to the main drivers in the Auckland market.
With this in mind the Bank is expected to implement lending restrictions on property investors after July. Until these restrictions take effect growth is expected to continue, before such moderating conditions are in place.
For more information please contact Malcolm Cox at Cox Partners Estate Agents, (06) 835 4321
Napier: Median Selling Price
Napier: House Sales