Property cycle strengthens in July as 'days to sell' falls, Mike Pero/Infometrics say

A housing market measure based on Real Estate Institute of New Zealand (REINZ) figures shows New Zealand's housing market continued to rebound in July as the REINZ's 'days to sell' figure fell from June. The Mike Pero Mortgages-Infometrics Property Cycle Indicator (PCI) rose to 5.95 in July from 3.98 in June. The PCI is based on changes in the amount of houses sold, changes in price and the time taken for houses to sell. "The biggest change in the market is the much shorter time houses are taking to sell," Mike Pero Mortgages CEO Shaun Riley said. The REINZ's days to sell figure was 37 in July from 41 in June and 58 in July 2008. The median sale price remained at NZ$340,000, while the number of house sale fell slightly over the month to 6,014. "Auckland and Wellington are showing strong signs of recovery with regional indicators of positive 6.94 and 6.59 respectively. All other North Island regions also recorded a positive PCI for July," Riley said. "Canterbury/Westland is leading the recovery in the South Island with a regional PCI of 4.51 in July," he said. "The only areas with a negative PCI in July were Central Otago Lakes and Southland, at negative 1.20 and negative 1.56 respectively." The PCI runs from negative 10 to positive 10. A score of positive 10 represents a strong upturn in the property sector, while negative 10 represents a strong downturn. "Lower sales volumes are usually the first indicator that a market upturn is coming to an end, followed by properties taking longer to sell. House prices are usually the last variable to change direction. House prices may still be rising, even though the Property Cycle Index is negative and showing a downturn."