House sales fall for 11th month in September

New Zealand house sales fell for the 11th month in September as fewer properties were put up for sale in the lead-up to the general election and mortgage loan restrictions reduced activity at the lower end of the market.

The number of houses sold fell 12 percent to 5,911 in September from the year earlier month, while sales of houses below $400,000 declined 18 percent, according to Real Estate Institute of New Zealand figures.

The Reserve Bank in October last year introduced restrictions on high-debt mortgage lending in an attempt to cool the housing market which is being driven by a shortage of housing in Auckland, the country's largest city, and earthquake devastated Christchurch, the second largest. Activity picked up in the last 10 days of the month, following the Sept. 20 general election, the institute said.

"Despite stronger activity in the latter part of the month, sales volumes were again well down on the same time last year, meaning that sales volumes compared to last year have now fallen for 11 months in a row," the institute's chief executive Helen O'Sullivan said in a statement. "A key theme reported by agents across the entire country is a lack of new listings. This may in part be a lag effect from the election - as with sales activity, listing interest is reported as having picked up in the last week of September."

The median price gained 5 percent in September to $420,000 from the year earlier month, down from a 7.7 percent annual pace in August, the institute said.

Compared with August, September sales volumes increased 7.8 percent while the median price was unchanged, the institute said.

The Reserve Bank has raised the benchmark interest rate by 100 basis points to 3.5 percent since March in a bid to cool inflationary pressures. Interest rates are currently on hold while the central bank assesses the impact of the hikes, but are expected to continue rising next year.

In September, the number of days taken to sell a house rose by four days to 35, compared with September last year, although it took three days fewer than in August, according to the real estate industry figures.

The stratified median housing price index, a measure developed to smooth out peaks and troughs in the market, increased 4.1 percent from the year earlier and was up 0.2 percent from August.

Auckland prices rose an annual 7.7 percent, while Christchurch increased 7.1 percent and Wellington 1.7 percent, according to the measure.

(BusinessDesk)