Signs of housing recovery in New Zealand

Country: New Zealand

3 June 2009

Green shoots of recovery are starting to emerge in the New Zealand property market – at least in Auckland.

Although property values remain soft, the volume of reported sales has risen in the past month.

Demand for homes in the country is rising, thanks to record-low interest rates, and greater housing affordability, particularly for first-home buyers.

The latest ASB housing confidence survey shows that a growing number of people are now attracted to the idea of buying property. Of those surveyed in Q1 59% of respondents felt it was a good time to buy a home, compared with 53% in the previous quarter.

ASB chief economist Nick Tuffey says the improved sentiment appears to be closely linked to the dramatic fall in interest rates in the past year.

According to Auckland's estate agency, Barfoot & Thompson, the region's housing market continued to surge in April, following better-than-expected performances in February and March. The average price of a home was NZ$502,726 (£196,838), up 2.2% month-month. A total of 809 homes were sold, up 79% on those for the same month last year.

"Traditionally April sales volume and prices can fall away markedly compared to March," says Peter Thompson of Barfoot & Thompson. "It is a seasonal factor, so to get an increase in price in April with only a modest fall in homes sold compared to the previous month is heartening.”

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