Auckland property sales reached a 20-month high as the decline in prices helped revive confidence, according to Barfoot & Thompson.
Auckland’s biggest real estate agency sold 924 houses in March, up 65.3% from February, it said in a statement. The average house price fell 5.8% to NZ$491,780 from the same month a year earlier, and 4% from February.
“We sold close to 300 homes more in March than in any month in the whole of 2008,” said Peter Thompson, the firm’s managing director. “Sellers are accepting that a price that is on average only 6% below values being achieved 12 months ago is realistic.”
Reserve Bank Governor Alan Bollard has slashed the official cash rate to 3% from 8.25% since July, driving down shorter-term and floating mortgage rates. He tried jawboning long-term wholesale rates lower “projecting interest rates to remain at relatively low levels for an extended period.” The median five-year mortgage rate of the four major banks climbed to 6.69% from a 6.5% trough in February, according to the GoodReturns.co.nz website.
“We are encouraged by signs that lower interest rates are beginning to have some impact on the economy,” said Shamubeel Eaqub, economist at Goldman Sachs JBWere. “However, we are wary of calling a bottom too early, given the very large challenges still facing the economy, both domestically and globally.”
Government data showed building consents for new homes rose 12%, seasonally adjusted, in February, the first gain in three months, as short-term mortgage rates encouraged investors to return to the property market, while the value of non-residential building approvals climbed about 6%.
Barfoot recorded its best attendance numbers at auctions in 12 months, selling 65% to 70% of all homes it put on the market.