On the weekend I was down in the beautiful Bay of Plenty enjoying the start of summer.

As I was driving to Royal Palm Beach yesterday afternoon to drop my beautiful little boy home to his mum after a fantastic weekend I noticed that there are a lot more for sale signs out again.

I decided to take a bit of a tour around some of the areas that have traditionally favored the investment market and it seems there are more signs in these areas as well.

Could it be that news of tax reform is scaring a lot of people out of the investment market or is it just the usual Christmas rush with people taking the opportunity to list there homes when the weather is warm and everyone wants to move to the beach (It was definitely warm weather and I officially put the heaters out in the garage for the year)?

Certainly if you wanted to sell, now is a great time, as according to one article I read over the last week approximately 14,000 new houses a year were being built, but 25,000 were needed to match population growth. The means more demand than supply could be one of the reasons why prices, as seen by the Real Estate Institutes new figures, have inched up sooner than many people might have thought.

The Real Estate Institute released new figures which show that the current median price for a home in NZ is now $355,000 topping the previous peak of $352,000 which was hit in September of 2007 however these numbers could be quite short lived as funding is still very difficult for a nation that has a huge number of small businesses and self employed people.

Is it the right time to be selling? That’s up to you however I can say this, waiting to get a few extra dollars in price may actually cost you more than you think, for example, in the last year the median house price went up by 6%, according to those same figures released by the REINZ, yet many peoples mortgages are fixed at rates a lot higher than that add to this the possibility that you are buying and selling in the same market, so even if you wait for a higher price it just means the property you buy next is going to be more expensive.

August 5th, 2009

Auckland’s largest real estate group Barfoot & Thompson said its average sale price in July fell 2.8% from June to NZ$507,384 and that its sales volume fell 9.5% with 779 properties sold over the month. (Update 1 includes ASB comment.)

“As is seasonal at this time of year, the average price edged down (from June),” Managing Director Peter Thompson said.

“It was an anticipated easing, as the market often marks time for a period before the start of spring activity,” Thompson said. “Overall, July activity can be seen as a month which emphasised that Auckland housing has found a new base. People are feeling comfortable with current prices and trends,” he said.

Sales volumes in July were their lowest since 559 in February, following a jump from 2008 lows in March, April, May and June.

The July sale price was up NZ$10,000 from the same month last year, while sales volumes rose 24%.

“More sellers are entering the market and the 1386 properties we listed for sale in July were an increase of 16.6 percent on June, and an 18.4 percent increase on July last year,” Thompson said.

“Our new listings were the highest they have been in four months, and it is yet another sign that Auckland is shaking off constraints caused by uncertainty about the economy and future prices,” he said.

“The average rent achieved remained steady at $388 a week, while the number of properties let to tenants increased by 7.5 percent to 790, on a par with that achieved in the traditional peak month of January.”

“July is often a solid month for letting properties, but this is the first time we have let the same number of properties in July as we did in January.”

Here is ASB economist Jane Turner’s take on the figures:

Barfoot and Thompson Auckland house sales (seasonally adjusted) remained reasonably steady in July, only falling 0.4% and up 23.8% on year-ago levels. This steady trend is consistent with mortgage approvals over July and suggests nationwide REINZ house sales will also remain firm. The housing market continues to hold onto its recent gains, although the level of turnover remains below average levels.

New listings (seasonally adjusted) have picked up over the past few months, up 8.2% in July following an 11% increase in June. New listings have been very weak, due to the weak housing market discouraging potential sellers. In addition, falling permanent and long-term departures may have been suppressing supply. However, potential sellers are now being tempted back in now the housing market is improving. Despite the pick up in new listings, the total number of available listings continues to decline, and starting to settle around average levels restoring the balance between supply and demand.

With the pick up in demand and the continued decline in excess supply, we anticipate that house prices are now likely to be stabilising. Median house sales prices month to month are not the best reflection of house prices, as they are affected by sales composition. QV house price index, due over this weekend, is a better gauge on house prices and is likely to show a smaller decline in house prices relative to year-ago levels.