The November 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 November. 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 November 2010 report shows a late but by no means insignificant rise in activity in the market. The volume of new listings grew indicating a sense of confidence on the part of sellers. 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 continues to creep up, but when judged against the rate of sale of property, which is lackluster, the inventory in number of weeks of sales now reaches significant levels.
A full print version of the NZ Property Report – November 2010 is published below and is available for download (1.3MB) and distribution.
Summary of the market – November 2010
The comment from the October NZ Property Report was that “spring had past the property market by!” clearly the November market activity shows that “the best was saved ‘til last!” The month saw a significant (and unseasonal lift) in new listings, in some ways making up for the somewhat quieter first 3 months of spring.
The monthly sales though have as yet failed to show any appreciable lift with October reported at 4,323 3,903, the lowest recorded total for October since record show back to 1992. This low rate of sale (currently averaging 4,340 4,171 per month) is driving the inventory levels to highs not seen for over 2½ years with the equivalent of over a full year’s worth of sales on the market. In some regions that total now exceeds 2 years (Central Otago & Wairarapa) and even over 3 years (Coromandel & Northland). The November sales data is yet to be released but there does appear to be some significant pockets of activity which are driving sectors of the property market especially at the high end of price bands.
These latest statistics in this report, which have been consistent for a number of months now, in regard to trends, all continue to point to a confident market, albeit a sluggish one. Asking price expectation whilst showing some weakness this month, does not appear to be under excessive pressure, however price would seem to be the only factor able to bust the log jam of unsold inventory of houses on the market.
The truncated mean asking price for all new listings in November fell from the peak of $420,451 in October to $417,660. On a seasonally adjusted basis the fall was less than 1% indicating that the confidence in sellers demonstrated by the volume of new listings is also reflected in asking price.
The current asking price continues to drift down below the peak of Oct 2007, currently off 2.7%.
A strong rise in new listings coming onto the market in November was higher than seasonally expected at 12,932 it was 7.3% up on a seasonally adjusted basis. Having seen slower levels of listings in the early spring season there was a sense of a “catch-up”.
On a moving annual basis the past 12 months have seen 140,214 new listings compared to 134,438 in the prior year an increase of 4.3%.
The level of unsold houses on the market at the end of November rose again to 54,365 from 52,043 in October. This represented the equivalent of 53.2 weeks of equivalent sales, as assessed on a seasonally adjusted basis.
The key driver of this rising inventory is more a reflection of somewhat lackluster sales than excessive new listings. The absolute level though at over a year of equivalent sales will continue to impact the market and maintain the “buyers-market” perspective.
Regional Summary – Asking price expectations
Whilst the national asking price expectation remained steady with just a small fall from prior month and a small increase over the recent 3 month average, the regional analysis shows some significant variances.
Amongst the 19 regions almost half showed a rise whilst the remained showed a fall. The three east coast regions of Gisborne, Hawkes Bay and Wairarapa all saw significant increases of more than 5%. The single largest fall in asking price expectation was seen in the Coromandel region which when combined with the rise in new listings may well reflect some significant re-pricing of existing listings which may be required to clear the inventory which now amounts to 262 weeks of equivalent sales.
All three of the major metro regions showed steady increase in asking price expectation.Regional
Regional Summary – Listings
The property market as judged from the perspective of the number of new listings coming onto the market from around the country, shows all the indications of a seller’s market as new listing numbers were well down on the prior year. The regional map shows a predominant blue colour for 11 of the 19 regions.
Some regions in particular are showing wild variations in new listings. The Central North Island for example had 208 new listings in October up 42% on prior year, whereas in November just 135 new listings came onto the market down 50% on prior year. Equally the Waikato went from listings in October down 25% to this month 890 new listings, up 6%.
The Coromandel region already challenged by a very high level of inventory saw a total of 349 new listings in the month up 35% of the prior year.
Regional Summary – Inventory
Whereas the trend in new listings across the country would indicate a move to a seller’s market, the extent of the level of inventory of unsold houses continues to point very clearly to a buyer’s market.
Again as seen in October just two regions display a degree of balance in relation to inventory and rate of sale, these being the West Coast and Gisborne, both small regions.
Within the 19 regions four recorded record high levels of inventory – Hawkes Bay / Northland / Taranaki & Waikato. Overall the provincial market continues to fair worse than the main metro markets. The total equivalent inventory for the 16 non-metro areas reached a high of 72.6 weeks in November. This compares to just 38.8 weeks for the total of the 3 main metro areas.
The Canterbury region has seen a steady built of inventory since the September earthquake, currently at 45.7 weeks, though still less than the peak of inventory in June 2008 at 49.9 weeks for that region.
Lifestyle property listings shot up in November recording an 8.4% seasonally adjusted increase, the current moving annual total is 6.2% ahead of last year with 12,273 new lifestyle listings over the 12 months. Strong growth was seen in the Bay of Plenty region up 49% and Wellington and Central Otago both more than double the new listings of a year ago. Canterbury region was also particularly strong with 139 new listings up 14% on November last year.
The truncated mean asking price remains strong at $558,371 which is up 0.4% against the recent 3 month moving average.
New listings of apartments did show a rise in November after what had been a steady decline in new listings since Feb. At 594 new listing it was still down 7.6% compared to November last year, but up a strong 13.5% on a seasonally adjusted basis from October indicating the true strength of the rise. Auckland as ever dominates the apartment market with 60% of all new listings. On a seasonally adjusted basis Auckland new listings were up 10%. The Canterbury market also fared well with 44 new listings, up 29% on a seasonally adjusted basis.
The truncated mean asking price for apartments was up 2.9% as against the recent 3 month average at $369,303. In the Auckland market the asking price for apartments is currently $307,101 down 3.5%.
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 12,932 new listings in the month of October a total of 184 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 1.5m 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 November 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 December 2010 will be published on this website on Saturday 1st January 2011 at 10am.