The May 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 May. 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.
A full print version of the NZ Property Report – May 2011 is published below and is available for download (1.0MB) and distribution.
Summary of the market – May 2011
The prolonged sluggishness of new property listings, which has been evident for nearly 2 years, has at last seen a tip in the balance of the property market from favouring buyers to favouring sellers. At least that is now being seen in two of the major markets around the country – Auckland and Queenstown lakes.
The Auckland market which saw strong late summer property sales has now as a consequence of these sales matched to the slow flow of new listings, seen inventory levels below long term average. At the end of May the inventory of unsold houses on the market fell to 30 weeks as compared to the long term average of 34 weeks. The last time this level was seen was at the end of 2009.
The asking price expectation of the new listings coming onto the market in May fell back from the peak seen in April. Historically there is always an adjustment seen at this time of year. The seasonally adjusted asking price fell 2% nationally and that was reflected right across the regions indicating that the market still senses no significant property price inflation as yet with new-to-the-market vendors pricing to attract buyers who are still small in number across the regions.
The truncated mean asking price for all new listings in May fell significantly from $429,249 in April to $414,308 in May. On a seasonally adjusted basis the asking price fell just 2% in the month indicating a degree of uncertainty amongst sellers.
The overall trend of the past 2 years continues to show strength in asking price expectation.
On a 12 month moving basis the number of new listings in the past year totals 127,843 as compared 144,375 for the same period a year ago – a fall of 12%.
The recent relative strength of sales as seen in March and April has now stared to see a clearing of what has been a high level of unsold houses on the market over the past 18 months. Heading into Winter, a time of traditionally weaker listing will likely see this inventory level fall further in coming months.
Regional Summary – Asking price expectations
After reaching a new peak of asking price in April the national asking price for new listings fell in May. This fall was reflected around the regions with 12 regions reporting falls and just 7 showing any increase. There is seasonal trend behind this which sees the asking prices for May fall significantly as compared to April, likely as a result of the market entering the winter period.
There were 5 regions showing declines of more than 5% in asking price with both Wellington and Queenstown Lakes among them, both of these regions are also showing low levels of inventory. This potentially points to a caution over the state of the market with no significant inflation expectation amongst vendors, new to the market.
Regional Summary – Listings
The continuing trend of new listings as has been the case for over a year is decline in number. Again the chart by region shows a overall trend towards a sellers market with only Marlborough and Central North Island bucking the trend to show year-on-year increases in listings.
Two regions in May recorded the lowest level of monthly listings stretching back 4 years – Northland and Otago.
The level of new listings in the Canterbury region continues to remain weak as a result of the earthquake. In May 1,188 new listings came onto the market, down 29% as compared to last year. Comparing the first 5 months of 2011 with 2010 the number of new listings in the region has fallen from 8,972 to 5,736 a fall of 36%.
Regional Summary – Inventory
The levels of inventory of unsold homes on the market changed markedly in May. For more than a year the predominant view has been that the property market is firmly stuck in a buyer’s market with inventory levels well above long term averages.
Starting in March and now accelerating through May the key markets of Auckland and now Queenstown Lakes are seeing the results of stronger sales matched with lower levels of new listings leading to these two markets now being viewed as seller’s markets.
Not far behind the regions of Otago, West Coast, Waikato and Bay of Plenty are edging to a turning point in the market with more balance between buyers and sellers.
That still leaves the remainder of provincial NZ firmly in a strong buyers market with 11 regions seeing existing inventory well above long term average.
The level of new listings of lifestyle property coming onto the market in May fell by 12% on a seasonally adjusted basis from April. A total of just 844 new properties were listed with a truncated mean asking price of $567,575. The asking price was up 2% as compared to the recent 3 month average, and up 12% as compared to prior year.
On a rolling 12 month average basis new listings are down 8.6% with 11,462 listed in the past 12 months compared to 12,546 last year.
Listings of apartments showed a 17% decline on a seasonally adjusted basis as compared to April with 406 new apartments coming onto the market. The truncated mean asking price for these new listings was $369,834, which was down 3.0% on the recent 3 month average, and down 2.1% as compared to May 2010.
In the Auckland apartment market which represents over 60% of the market there were 267 new listings with an asking price of $328,326. The new listings shows a decline of 20% on a seasonally adjusted basis, and a 27% decline when judged on a year-on-year basis.
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 95% 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 1,020 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 9,898 new listings in the month of May a total of 98 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 400,000 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 1.6m 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 1,020 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.
The full NZ Property Report for May 2011 can be downloaded here (1.0MB 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 June 2011 will be published on this website on Friday 1st July 2011 at 10am.