New Zealand house sales in March recorded the best monthly result since November 2007, adding to signs of a real-estate-market recovery that may boost consumer confidence and spending later this year.
Sales rose 25.3 percent from a year earlier, the Real Estate Institute of New Zealand said in a report today. Sales reached 7,330 in March from 6,168 in February, according to the figures, which don’t adjust for seasonal variations.
Rising residential property sales suggest domestic demand is improving and the economic recovery will pick up pace later this year after central bank Governor Alan Bollard last month signaled he may leave the benchmark interest rate unchanged at a record-low 2.5 percent for much of 2012.
“Low mortgage interest rates are kick-starting the market,” Mark Smith, senior economist at ANZ National Bank Ltd. in Wellington, said in an e-mailed note. “We have not yet seen a housing-induced lift in credit growth or consumer spending. Cash rate hikes are some way off.”
First-quarter sales rose 11 percent from the previous three months ended Dec. 31, Smith said, citing the ANZ’s seasonally adjusted figures. Buyers are competing for a low number of available properties, pushing prices higher, he said.
House prices rose 1.9 percent from February, according to the REINZ price index. From a year earlier, the gauge gained 4.2 percent, the report showed. The time needed to sell a house declined to 35 days from 46 days in February.
“The real-estate market has had a strong March,” REINZ Chief Executive Officer Helen O’Sullivan said in the report. “Prices are certainly not rising sharply, but the trend is certainly starting to move upwards.”
Sales in the Canterbury region doubled from a year earlier, when the area was recovering from a devastating earthquake on Feb. 22, 2011, that killed 185 people, REINZ said.
In Auckland, home to a quarter of New Zealand’s 4.4 million people, sales rose 17 percent from March last year.
“The Auckland region has also recorded a new record median price, reflecting the rising demand for housing in the city and the continuing shortages of available stock,” O’Sullivan said. “Outside of the Auckland and Canterbury regions, most of the country is seeing an upward trend in sales volumes, although price gains outside of these centers are relatively modest.”