Demand driving house prices: REINZ

They show that the August national median price recovered to reach the May all-time record figure of $350,000, compared with the July figure of $345,000.

Sales slipped further back, from an already low figure of 6,660 in July to just 6,394 in August, well down on the August 2006 figure of 8,556 sales, and the lowest August sales for seven years.

REINZ president Murray Cleland said August sales traditionally recovered as part of the run up to the prime spring selling period, but the latest figures were ‘surprisingly skinny’.

“There has been an almost excessive amount of speculation concerning the residential property market and it is certainly too early to say that it has shrugged off major confidence considerations such as interest rates”.

Cleland says that demand for housing in New Zealand continues to exceed supply and while that situation continues, prices will always be firm. However, he warns that on such low turnovers it is difficult to say from month to month that the market is good, bad, or indifferent.