14 May 2013

House sales remain strong - REINZ

7:45 am on 14 May 2013

The Real Estate Institute (REINZ) says the number of houses sold last month were at their highest for an April month in six years.

The Institute says 7,104 houses were sold last month, 25% more than April 2012.

REINZ says its housing price index, which smooths distortions caused by more or fewer expensive or cheaper houses being sold in any one month, rose 0.8% from March and was 9.8% higher than a year ago.

Economist at Infometrics, Matthew Nolan, says house sales have risen because of cheap mortgages and improving consumer confidence.

However he says two cities are driving the rise in prices.

"In a lot of ways we are mainly talking Auckland and Christchurch. Around the rest of the country house sales have been picking up - they are up a good 8% from the middle of last year when we adjust for all of the seasonal factors.

"However, they still are nearly 10% down on the average of the last decade."

REINZ chief executive Helen O'Sullivan says the housing market is not really as hot as it may seem at first glance.

"The peak of the volumes was actually back in 2003 and 2004 and while we're seeing the 2007 totals being returned to in some markets, particularly Auckland, the comparison back to 2003 is quite different.

"In 2004 there were 9600 transactions in April while this year it's 7100. It's the highest in six years but it's still only 70 or 80% of those figures we were seeing nine years ago."

Auckland prices fell 0.8% in April from March but were still up 14.1% for the year.

Christchurch prices rose 1.9% for an annual increase of 12.7%.

Wellington prices increased by 4.4% to reach a new record and other parts of the South Island also hit new highs.