Southern house prices have taken another hit, with Otago and the Central Otago lakes regions prices declining respectively 5.8% and 11.8% on those for April last year.
But Otago and the lakes district did reflect the national trend in the number of house sales picking up in April, compared with a year ago, according to figures released from the Real Estate Institute of New Zealand yesterday.
ASB chief economist Nick Tuffley said New Zealand's housing turnover had bottomed in the second half of last year and started to recover in 2009, and had "rebounded strongly" during April, with seasonally adjusted national house sales picking up 25% from March.
"The housing market is finally reacting to the substantial interest rates cuts delivered by the Reserve Bank of New Zealand over the past nine months," Mr Tuffley said in a statement yesterday.
However, he cautioned that with the Reserve Bank saying last month the record 2.5% interest-driving official cash rate may not fall much further, it had prompted "a dramatic pick-up in mortgage approvals, and subsequently house sales, as borrowers rushed to lock in fixed mortgage rates".
Since the economy went into recession almost 18 months ago, the Reserve Bank had slashed the official cash rate by 5.75% to a record low of 2.5% last month to stimulate the economy.
Dunedin-based Real Estate Institute of New Zealand president Mike Elford said the figures reinforced "a certain level of stability" in relation to price and turnover, and were pleasing, as April was traditionally a slower month due to school holidays and seasonal adjustments.
"The figures are not hugely significant, but enough to generate a degree of optimism about the way forward from here," Mr Elford said.
The total of 6210 homes sold nationally in April was down on March's 6694 but still well up on the February total of 5228.
This compares with 4450 sold in April 2008.
It was "a pleasing trend", Mr Elford said of the almost 40% increase nationally.
In Central Otago lakes, 95 houses sold in April, and 72 in March, with the median price down to $400,000 from the $454,000 in April last year.
This April, 226 Otago homes sold (211 in March), with a median price of $221,250 ($235,000 in April last year).
Mr Tuffley said the level of housing turnover had recovered to levels last seen in late 2007, just below the 15-year average house sales rate.
"House prices still remain lacklustre, with the median [national] house price of $340,000 still down 1.4% on year-ago levels," Mr Tuffley said.
He said house prices tended to lag about three to six months behind house sales, and if the recent strength in house sales was maintained, prices were likely to be close to the bottom of their cycle.
