New Zealand Property Market Shows Signs of Gathering Pace

The property market in New Zealand is showing signs of gathering pace as residential property sales increased substantially in January compared to the same month in 2011. Latest figures from the Real Estate Institute show the number of transactions increased by 25% to reach 4,073 in January 2012 when compared to January 2011. Although this is a huge increase, January last year was notable for being the worst month ever recorded. Nationally the median sales price is $355,000, which is 4.4% higher than January last year.

The REINZ stratified house price index is just 3.8% below its peak in 2007 and has shown an annual increase of 4.3%. House prices are remaining relatively stable which may be down to buyers reluctance to take on too much debt due to continuing economic uncertainty.

The median house price in Auckland increased by 4.7% to reach $471,000 compared to a year earlier, and sales increased by 27% in January. Wellington house prices increased by 4.1% to $385,000 from January last year, and sales were up by 15%. In Christchurch property prices increased by 2.3% to $337,444, and property transactions rose by 4.1%. Dunedin house prices rose by 11% to reach an average of $245,000 while sales increased by 35%.

House prices are being held up by a shortage of homes, especially in Christchurch and Auckland. Auckland in particular has very few new homes coming onto the market and this is forcing property prices upwards. In spite of the fact that property prices are rising, they are not increasing at such a rate to fuel worries about a new housing boom, with property prices expected to rise by 3.5% this year.

Asking Prices of UK Property Increases by 1.2%

December saw the average asking price for new homes in the UK increase by 1.2% compared to November, according to Smart New Homes. The fourth quarter of 2011 saw consecutive monthly rises with prices increasing by 2.6%, while the annual growth rate was 3.2% in 2011.

This is significant as it is the first year to show positive growth since 2006, and the average price of a new home is now £227,098 which is £7,029 more than December 2010. Although the market for new homes continues to show price stability, the same can't be said of the general market which saw prices decline over the last quarter of the year. Asking prices for new homes are now more than in the general market for the first time since March 2009.

The largest annual price growth for last year was in the West Midlands where prices increased by up to 12.6%. In London prices fell by 7.8% over the year and by 2.2% during the fourth quarter, but rose by 3% in December. There were fewer new homes coming onto the market during the last quarter of 2011 as many developers chose to delay projects until New Year, but annual growth was still 10.2%.

The largest house builders also saw the number of completions increase last year compared to 2010, and many have purchased more land. Apparently most new homeowners are looking for a property with contemporary design which can cater to modern-day needs. Builders have also managed to maintain affordability through introducing new mortgage products, and the industry is also working with the government for the introduction of its new mortgage indemnity product later on this year.