House sales fall in August on subdued listings, looming election

New Zealand house sales fell in August as a lack of listings compounded the chilling effects of rising interest rates and mortgage loan restrictions, and as the upcoming general election adds another uncertainty for buyers.

The number of houses sold fell 16 percent to 5,481 in August from the same month a year earlier, and were down 7 percent from July, according to Real Estate Institute of New Zealand figures. The national median sale price was $420,000 in August, up from $390,000 a year earlier, and $416,000 in July.

"While LVR (loan-to-value ratio) restrictions are still cited as being a significant factor, lack of listings continues to be an issue in most parts of the country, with low stock levels restricting buyer choice," REINZ chief executive Helen O'Sullivan said in a statement. "All eyes are on listing numbers which would normally be increasing at this time of year, but which may be impacted by the timing of the general election."

Earlier this month, Auckland's biggest realtor Barfoot & Thompson said new listings were on the decline, pointing to the Sept. 20 national vote as creating uncertainty in the market. The realtor had 3,226 houses on its books at the end of August, down 1.4 percent from the end of July, though up from 2,999 in 2013.

Today's REINZ figures showed the number of sales below $400,000, the prime target in the Reserve Bank's restrictions on low equity home lending, fell 25 percent to 2,523 in August from the same month in 2013, accounting for about 46 percent of all turnover. That's down from 51 percent a year earlier.

The number of days to sell rose one day to 38 days from July, and was four days longer than August 2013.

The stratified median housing price index, a measure developed to smooth out peaks and troughs in the market, rose 1.1 percent from July, and was up 4.8 percent on an annual basis.

In Auckland, prices rose 0.4 percent in the month for a 5.8 percent annual increase based on the index measure, while Wellington prices climbed 5.5 percent in August, for a 2.8 percent gain on the year. Christchurch prices fell 0.8 percent in August, and were up 11 percent over the past 12 months.

(BusinessDesk)