The December 2010 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 December. 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 December 2010 report shows a record low level of new listings coming onto the market. This was matched with a slight drop in asking price expectation. The constant factor in the market is the scale of the inventory of unsold houses which in absolute number began to decline this month as somewhat stronger sales began to clear some of the inventory. When judged against the rate of sale of property, which continues to be weak, the inventory in number of weeks of sales continues to sit well above long term average, currently at 50 weeks.
A full print version of the NZ Property Report – December 2010 is published below and is available for download (1.3MB) and distribution.
Summary of the market – December 2010
December traditionally is the quietest month of the year for listing of new properties for sale. The run up to Christmas tends to curtail the listing period to a part-month rather than a full-month with the consequential lower listing count. On a seasonally adjusted basis December this year shows no percentage change as compared to November, indicating the seasonal trend was expected, however the absolute level of listings is significant at this new low level.
The 2010 year has seen a consistent lower level of listings as the sales of properties has slowed through the year. In the full year 138,789 new listings were added to the market which began the year with 52,817 listings (at the time equivalent to 37 weeks of sales). The year ended with 53,077 barely a discernible difference in absolute number of properties on the market yet with a lower rate of sale the inventory of unsold houses now amounts to 50 weeks.
The recent sales report for from REINZ for November of 5,138 properties sold, did show a significant increase of 28% on a seasonally adjusted basis indicating that the market was showing some signs of life as the stability of interest rates and economic indicators moved into more positive territory.
The indicator of asking price expectation has shown a repetition of 2009 with a couple of peaks; currently returning down to a midpoint reflecting the fact that in the past 3 years vendors expectations of price increases have as yet not found a firm footing.
The truncated mean asking price for all new listings coming onto the market in December fell very slightly from $417,660 to $415,750. On a seasonally adjusted basis the asking price actually rose by 1.3%. Asking prices seem to be showing volatility especially with such low levels of listings coming onto the market.
The current asking price continues to drift down below the peak of Oct 2007, currently off 3.1%.
The traditional seasonal fall in December was as expected, but when coming off a slower level of preceding months the actual level of 8,924 hit a record low. No single month since Jan 2007 has seen a total of less than 9,000 per month.
On a moving annual basis the past 12 months have seen 138,789 new listings compared to 135,416 in the prior year an increase of just 2.5%.
The level of unsold houses on the market at the end of December fell to 53,077 from 54,365 in November. This represented the equivalent of 50.1 weeks of equivalent sales, as assessed on a seasonally adjusted basis.
The inventory of unsold houses, whilst dipping slightly as a consequence of a strong November sales continues to sit well above the long term average of 40 weeks of equivalent sales, this still sees the market showing a “buyers-market” inclination.
Regional Summary – Asking price expectations
Amongst the 19 regions almost half showed a rise whilst the remained showed a fall. Strong increases in asking prices were seen in the North Island with Auckland showing a significant 5.2% increase as compared to recent 3 month average. The Hawkes Bay and Central North Island also showed strong increases, although in the latter region the volume of new listings was low.
Price movements in asking prices across the South Island were less significant with the Nelson / Marlborough region showing increases of over 5%.
Regional Summary – Listings
With the record low level of new listings in the month the sentiment of the market based on new properties fresh to the market would seem to show an inclination to a seller’s market. This however takes no account of existing inventory of unsold houses on the market
In spite of the overall fall in new listings across the country, both the Coromandel and the Wairarapa both saw rises in new listings as compared to December last year.
There were 5 regions of the 19 across the country that saw year on year falls of more than a third – Northland, Gisborne, Hawkes Bay, Marlborough and Central North Island. With the exception of the latter region all of the others still have a relatively high inventory of unsold houses on the market.
Regional Summary – Inventory
Despite the record low level of new listings and the relatively strong sales of properties in November the overall level of inventory of unsold houses on the market is still significantly above the long terms average (50 weeks as compared to 40 weeks).
The Auckland region now sitting with 36 weeks of unsold houses as compared to a long term average of 34 weeks is more finely balanced and with a 25% seasonally adjusted increase in property sales in November is certainly a more active market than other areas of the country.
Also of note is the Canterbury region which whilst suffering a significant initial impact of the September earthquake reported a 38% seasonally adjusted increase in sales in November – such levels seeing a reduction in available inventory edging the region towards a more balanced market.
In terms of asking price expectation the truncated mean for the month was $537,368 which was 13% down on the same period last year and 4% below the recent 3 month average. The current asking price is 15% below the peak asking price which was in February 2009.
Listings for apartments fell in December from 594 in November to 452, again not a record low, that being 352 in January 2009. Over the past 12 months a total 6,651 new apartments have come onto the market – up 3.7% as compared to the total of 2009 at 6,416. The asking price (truncated mean) rose in December by a significant 26% as compared to the recent 3 month average.
The Auckland apartment market showed a degree of activity with 268 new listings at an asking price of $479,258. This asking price was significantly up on the recent 3 month average of $315,410. This asking price is the highest level of asking price recorded going back to January 2007.
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 8,924 new listings in the month of December a total of 117 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 122,000 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 December 2010 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 January 2011 will be published on this website on Tuesday 1st February 2011 at 10am.