The Home Affordability Index recorded a drop of just 1.6% for the same period, a significantly smaller drop than the sharp June quarter decline of 7.9%, the steepest recorded since December 1996.
A significant slowdown in residential sales was heralded in the latest Real Estate Institute release, down 19.1% on the same period last year.
Quarterly dwelling sales hit 24,360 compared to 30,121 in 2003. However, sales remain historically high when compared to normal residential real estate cycles in New Zealand.
The New Zealand Median Dwelling Price dipped slightly over the quarter to $247,000, down 0.4% from the high of the June quarter of $248,000. Interest rates also continued to climb for a third consecutive quarter.
Roger Perry, General Manager Savings and Investment for AMP said, “While we have seen home affordability decline over the last year, this has mainly been as a result of rising house prices. Now, in this last quarter, we are seeing rising interest rates start to bite for the first time.
But, despite this, homes still remain considerably more affordable than during the last housing boom in the mid 1990s.”
Massey Universitu senior lecturer in real estate Graham Crews warned that it was easy to misread the reported slowdown in the residential property market.
“The last quarter’s sales are down on the same period last year, when sales had reached an all time high. However, it’s important to note that sales are still up on 2002, which was also a very busy year.”
All but two of the 11 regions (Auckland and Nelson/Marlborough) reported a quarterly lift in median dwelling prices, while all regions except Nelson/Marlborough recorded a quarterly decline in home affordability.
The Taranaki region led with the steepest affordability decline at 18.9%, followed by Hawke’s Bay (12.9%). Nelson/Marlborough was the only region to record an improvement in quarterly affordability, at 2.8%.
The New Zealand index reflected a 12 monthly decline in home affordability (13.5%) for the eighth consecutive quarter, the steepest annual decline recorded in eight years.
Home sales for the past year declined to 114,523, down from the yearly total of 119,881 reported in the last quarter.
However, sales were still up on the previous year (Sept 02 - Aug 03) which recorded 113,845.
The median dwelling price also moved up 14.9% over the past year from $215,000 to $247,000.
In terms of home affordability, all 11 regions recorded a 12 monthly decline.
| Percentage change in home affordability____in the past 12 months | | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- | ----------- | | Region__NorthlandAucklandWaikato/Bay of Plenty/ GisborneHawke’s BayTaranakiManawatu/WanganuiWellingtonNelson/Marlborough/KaikouraCanterbury/WestlandOtagoSouthland__New Zealand | | Decline | | | 13.2% | | | 5.7% | | | 13.3% | | | 28.4% | | | 36.3% | | | 20.4% | | | 15.4% | | | 9.6% | | | 35.4% | | | 37.3% | | | 16.8% | | | 13.5% |
