The January 2011 NZ Property Report published by Realestate.co.nz provides an insight into the state of the New Zealand property market as measured by the supply side of the property market over the month of January. The key measures of the market analysed in the report are the number of new listings, the asking price expectation for those new listings and the level of inventory of unsold houses on the market at this time. The report is compiled from data captured by the website and represents close to 95% of all property movements in the NZ market as managed by licensed real estate agents.
The January 2011 report shows a new record low level of new listings coming onto the market. This was matched with a significant drop in asking price expectation. Whilst the level of new listings would normally push the market in favour of sellers given the dearth of new listings, the significant level of unsold property still on the market presents an opportunity for buyers.
The market as it enters the key summer period is opening up some opportunities with vendors considering putting their house on the market able to take advantage of an uncluttered position in the portfolio of new listings, ready able to attract the buyers that are out there. Existing property owners who have a property for sale as part of the current unsold inventory may need to review their asking price expectations as the new listings may be more reflective of the market today.
Buyers have a varied and diverse selection of property to review before making buying decisions with 48 weeks of inventory of unsold houses presenting a level considerably above the long term average of 40 weeks.
A full print version of the NZ Property Report – January 2011 is published below and is available for download (1.3MB) and distribution.
Summary of the market – January 2011
The first month of the year is traditionally a quiet period with significantly less business days and therefore listings coming onto the market tend to be subdued. The level of new listings for January 2011 is significantly low as compared to long term averages. Back at the start of 2008 as the Global Financial Crisis was just starting and the property market was turning down, a total of 26,097 new listings came onto the market in the combined months of December 2007 and January 2008; a year later as the market abruptly slowed the number in Dec/Jan had fallen to19,313. In 2009/2010 a year ago, there had been a degree of pick up to 20,621. This year over the same period the total is 17,224.
The market situation is unusual. Such low level of listings would normally reflect in a tight market where sellers would have the upper hand; however the scale of the unsold inventory, matched to still relatively low levels of sales, means that buyers have a great selection to research and a strong buyer advantage. It strangely would seem to be a market where the needs of buyers and sellers can be met. New listings tend to attract most interest in a property market and with such a recent shortage; new listings in the coming months will likely attract buyer interest. Recent new vendors with new listings are setting realistic price expectations as shown by the truncated mean asking price down to $406,525 this month.
Set against these statistics is the news that in terms of buyer interest online it could not be more active. As measured by Nielsen Online January saw over 2,000,000 browser visits to all the real estate websites in NZ, up 25% from 2010.
The truncated mean asking price for all new listings coming onto the market in January fell by over $9,000 from $415,750 to $406,525. On a seasonally adjusted basis the asking price remained unchanged from December at $416,666. There is traditionally a fall in asking price in January.
The current asking price slipped further from the peak of asking price back in October 2007, it is currently off 5.2%.
Traditionally January is a weak month as it is a short business month; however the fall from the record low of new listing in December is significant. Just 8,300 new listings compares to 10,272 a year ago and 9,942 in January 2009.
On a moving annual basis the past 12 months have seen 136,817 new listings, just up on the 135,746 in the prior 12 month period, an increase of just 0.8%.
The level of unsold houses on the market at the end of January rose slightly to 53,297 from 53,077 in December. This represented the equivalent of 47.9 weeks of equivalent sales, as assessed on a seasonally adjusted basis.
The inventory of unsold houses remains high in absolute terms as the sales activity impact is not being felt, even allowing for the significant lower level of new listings.
At the current level the inventory still remains well above the long term average of 40 weeks.
Regional Summary – Asking price expectations
The very clear message from the chart below showing all of the 19 regions is that the asking price expectation of sellers with new listings right around the country is that asking prices are slipping lower. Nationally asking prices are down 2.7% as compared to the recent 3 month average. The only regions bucking the trend are the three east coast regions of Coromandel, Bay of Plenty and Gisborne, together with Southland.
Significant slippage in asking prices are being seen in 5 regions – Waikato, Central North Island, Queenstown Lakes, Otago and the largest fall of 8.4% in the Hawkes Bay. The three main metropolitan regions of Auckland, Wellington and Canterbury are all showing weaker asking prices of between 3% and 4%.
Regional Summary – Listings
The national low record level of new listings for January was reflected right across the country with all but 2 of the 19 regions showing new listings down as compared to January 2010.
There were 7 regions reporting a record low of listings – Waikato and the Bay of Plenty, Central North Island and Manawatu / Wanganui. Then in the South Island, Otago, Canterbury and the Central Otago Queenstown Lakes district.
Such low levels of listings pushes the market into a situation with a shortage of new properties to attract buyer, for despite the high inventory levels the attraction of new listings remain the lifeblood of the industry.
Regional Summary – Inventory
The inventory of unsold property on the market continues to ease since the latest peak in November last year when the inventory stood at 53.2 weeks of equivalent sales. It has now fallen to 47.9 weeks. Whilst this is a continuing trend of easing, the level of inventory remains stubbornly above the level at the same time last year and the long term average.
This level of inventory leads to an assessment of the market being a buyer’s market; however the shortage of new listings is lessening this effect given the dearth of new properties to attract such buyers.
Set against this overall high level of inventory there are key markets where inventory levels are pretty much now at long term averages – Auckland and Wellington as 2 key markets are fairly balances and the Central North Island is now below long term average establishing this region as being in a seller’s market situation.
Lifestyle property listings fell significantly in January. At 727 new listings, the month represented a new record low. As compared to January last year the level of new listings is down 22%.
The asking price expectation for the new listings was up slightly at $540,825 from $537,368 in December. This represents a 3.2% decline as compared to January last year and a 3.5% decline in asking price as compared to the recent 3 month average.
January new listings of apartments came close to beating the prior low record of 352 in January 2009. For January just 363 new apartment listings came onto the market. This represents a 16% year on year decline. The asking price expectation for apartments remains low with a figure of $362,041 in January down 8.3% as compared to the recent 3 month average and only just up on the record low of $356,306 in October 2010.
In Auckland just 238 new apartment listings came onto the market which represented a 5.2% year on year decline. The asking price for Auckland apartments in the month was $342,250 which was 7% down on the recent 3 month average, but identical to the asking price expectation of a year ago.
Property Price Index
Comparing the sale price of properties across the country to the asking price expectation is not a perfect comparison; however the trends tend to align. The benefit is that the data for asking price is of the market today, whilst the selling price is reflective of the market active between 4 and 6 weeks ago. The latest comparison is highlighted below:
Realestate.co.nz data is compiled from asking prices of new residential listings as they come onto the market via subscribers to the realestate.co.nz website. The Realestate.co.nz website currently has over 94% of all licensed real estate offices subscribing and providing all of their listings onto the website. The asking price is presented as a truncated mean price at a 10% interval.
REINZ: data is compiled from reported unconditional residential sales from all members of the Real Estate Institute of New Zealand representing all licensed real estate offices. The sale price is published as a stratified median house price and is developed in association with the Reserve Bank of NZ.
The monthly asking price for new listings presented in this report utilises the measure of ‘truncated mean’. This measure is judged to be a more accurate measure of the market price than average price as it statistically removes the extremes that exist within any property market that can so easily introduce a skew to traditional average price figures.
The truncated mean used in this report removes the upper 10% and the lower 10% of listings in each data set. An average or mean of the balance of listings is then calculated.
With the largest database of properties for sale in NZ, realestate.co.nz is uniquely placed to immediately identify any changes in the marketplace. The realestate.co.nz NZ Property Report is compiled from new listings coming onto the market from the more than 1,050 licensed real estate offices across NZ, representing more than 95% of all offices.
With an average monthly level of over 10,000 new listings, the realestate.co.nz NZ Property Report provides the largest monthly sample report on the residential property market, as well as a more timely view of the property market than any other property report. The data is collated and analysed at the close of each month, and the Report is compiled for the 1st day of the following month. This provides a feedback mechanism as to the immediate state of the market, well in advance of sales statistics which by the very nature of the selling process can reflect activity with a lag of between 2 and 4 months.
In analysing the details of the 8,300 new listings in the month of January a total of 81 listings have been excluded due to anomalies. The categorisation of Lifestyle property is defined by the land area of the property. The criterion is a property having in excess of 0.3 hectares and being situated outside metropolitan areas.
Background to Realestate.co.nz
Realestate.co.nz is the official website company of the real estate industry of New Zealand, it is an industry owned web business providing online marketing services to the real estate industry. The shareholders in the business comprise the REINZ (50%) and six of the largest real estate companies (50%).
The business operates a portfolio of websites all focused to specialist sectors of the real estate market:
Realestate.co.nz is the heart of the business and is focused to the residential property market. It features the most comprehensive selection of property for sale and rent across NZ. The website attracts a significant monthly audience of over 370,000 unique browsers, with over 110,000 of those visiting from countries outside of NZ.
nzFarms is a specialist website presenting the most comprehensive selection of farms and agricultural businesses on the market across NZ. At this time it features around 5,000 listings for all types of farms and agricultural land as well as over 11,000 lifestyle properties.
Prime Commercial is a specialist website presenting the most comprehensive selection of commercial property for purchase or lease on the market across NZ. At this time it features over 27,000 listings for all types of properties – retail, commercial, industrial and investment properties.
Prime Business is a specialist website presenting the most comprehensive selection of businesses for sale on the market across NZ. At this time it features over 4,300 listings for all types of businesses – retail, tourism, wholesale as well as franchise opportunities.
Zoodle is a specialist property information website providing very detailed data on all residential properties in NZ. The database comprises over 1.5m properties with detailed specifications, map and local amenities. The site provides online reports for free and for purchase covering valuation and legal information to greatly assist the needs of property buyers and sellers.
The web business of Realestate.co.nz site is the most comprehensive real estate web operation in NZ, currently hosting over 120,000 listings, covering this portfolio of residential property for sale and rent, commercial property for sale and lease, rural properties and farms, as well as businesses for sale. With a subscriber base of over 1,050 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.
The full NZ Property Report for January 2011 can be downloaded here (1.3MB pdf document). Additionally the raw data is accessible here as an Excel spreadsheet enabling anyone to analyse the raw data and establish any trends or observations.
Usage rights are governed under attribution to the source of the data being Realestate.co.nz. The next NZ Property Report for February 2011 will be published on this website on Tuesday 1st March 2011 at 10am.