The February 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 February. 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 February 2011 report covering the final month of summer shows an active level of new listings coming onto the market. The total of 11,395 is up 37% as compared to January, but down 20% as compared to February last year. The seasonally adjusted number of new listings for February shows a 9.5% increase. All of these numbers show that in the context of recent market activity the property market in NZ is somewhat more active, however when assessed over the recent couple of years the market continues to be weak and the recent 12 months is the lowest level of activity with just 133,883 new listings in the recent 12 months, down 3% as compared to the same period 12 months ago.
The expectation of vendors remains confident despite the low level of sales volume. The truncated mean asking price rose in February by 3.3% to $420,265. There is a traditional seasonal lift in asking price at this time of year and allowing for the seasonal adjustment the asking price actually fell slightly by 1.1% to $412,128. This February asking price of $420,265 does come within 2% of the peak of the market asking price from back in November 2007.
The inventory of unsold houses rose slightly in the month, having fallen for the past 3 months. The level of 48.9 weeks of equivalent sales still sits well above long term average at 40 weeks. The key factor for this continual high level of inventory is the weak sales volumes which with just 3,252 property sales in January, places the past 3 months of sales as amongst the lowest 3 month period on record with just 13,438 total sales.
In overall terms the NZ property market continues to turnover at a slow rate. The relative levels of inventory as matched to sales volumes is high indicating a buyers market. However the actual level of new listings continue low which is resulting in specific markets seeing a genuine shortage of listings which is stimulating price as a function of unsatisfied demand. This is most conspicuously seen in the major cities. Auckland especially is showing this with an asking price expectation which peaked in December and in February continues at high levels. Equally the level of new listings in the Auckland market is amongst the highest in the country with over 34% of all listings coming from this region, the highest share seen over the 4 years of this report
A full print version of the NZ Property Report – February 2011 is published below and is available for download (1.3MB) and distribution.
Summary of the market – February 2011
After seeing the first two months of summer result in record low levels of new listings the month of February saw a strong rise with 11,395 new listings come onto the market. This level, whilst up a seasonally adjusted 9.5% as compared to January was still well down on the February levels of 2010 (14,329) and 2009 (12,164). This clearly shows that the overall sentiment in the market is quiet as was witnessed by the January sales levels reported by REINZ of 3,252, the lowest month on record.
The rise in new listings coupled with the low sales saw the inventory of unsold homes on the market rise again as measured on an equivalent number of weeks of sale basis. Having fallen for 3 months in a row the inventory levels rose to 48.9 weeks – well over 11 months supply. This level as compared to a long term average of 40 weeks means the property market is still very much in the camp of a buyer’s market with ample selection of properties to review.
The truncated mean asking price for all new listings coming onto the market in February rose by over $13,000 from $406,525 to $420,265.
On a seasonally adjusted basis the asking price actually fell by 1.1% to $412,128. The summer peak of new listings traditionally sees a rise in asking price.
The current asking price edged closer to the peak of asking price back in October 2007, it is currently just 2% below that peak.
The record lows seen in the months of December and January when in total 17,224 new listings came onto the market, have been replaced by a surge in listings in February with 11,395 new listings coming onto the market. This level whilst relatively strong as judged by recent months, is significantly lower than prior years. The February total shows a 20% decline as compared to February last year.
On the most recent 12 month period a total of 133,883 new listings have come onto the market which represents a 3% decline compared to the same period last year.
The level of unsold houses on the market at the end of February fell slightly to 52,673 from 53,297 at the end of January. This represented the equivalent of 48.9 weeks of equivalent sales, as assessed on a seasonally adjusted basis.
The inventory of unsold houses remains high in absolute terms as the level of sales activity continues to be so weak.
At the current level the inventory still remains well above the long term average of 40 weeks.
Regional Summary – Asking price expectations
In spite of the overall rise in asking price nationally from $406,525 to $420,265 the regional picture shows significant variance. Just 7 of the 19 regions are showing increases in asking price. Of the remaining 12, four regions are showing falls in asking price of greater than 5% when judged against the recent 3 month average.
The significance in the price movement in the national asking price is the fact that the 3 major metro areas of Canterbury, Wellington and Auckland collectively representing 54% of all listings and in the month all saw increases in asking prices of up to 3%. In the case of Auckland and Wellington the February asking price was within 3% of the peak pricing which was reached towards the end of last year, this would indicate that the local markets in these key cities are more active with pressure on prices more noticeable than in provincial areas of the country.
Regional Summary – Listings
Judging the regional property market based on the number of new listings and the change over the past 12 months potentially presents a misleading picture as all regions are showing a significant year-on-year decline. This picture presented in the chart would normally indicate a move to a sellers’ market when listings are in short supply, however at this time the governing factor is the weakness of sales. So despite the low volume of listings the rate of sale still means that inventory of unsold properties in overall terms is growing.
In total 9 of the 19 regions are showing volumes of new listings over 20% down as compared to February last year. The issue could arise in the coming months when if sales were to be stimulated by seasonal factors matched to favourable lending rates the lack of new listings may result in pressure in local markets.
Regional Summary – Inventory
The inventory of unsold houses on the market rose in February after seeing 3 consecutive months of falls through the new year period. At 48.9 weeks this represents over 11 months of equivalent sales of property on the market. This results in 52,673 properties on the market (excluding sections).
Across the country there are just 2 regions (Central North Island and Bay of Plenty) that have a fair balance between inventory and sales. The remaining 17 regions comprise 10, which are significantly having an inventory well above long term average with the remaining 7 regions having level just above long term average. Such levels of inventory above long term average highlight a buyers market with ample selection of property for sale.
It is now over 12 months since the market last showed an inventory level below long term average as was seen through the 2009 year.
A total of 936 new listings of lifestyle properties came onto the market in February. This represented a 6% increase on a seasonally adjusted basis from the prior month, when seen against February last year it represents a 17% decline indicating that the lifestyle sector is performing in line with the overall property market.
The truncated mean asking price rose by 2.2% from January to a level of $552,591. This level still remains well below the peak of asking price seen in February 2009 at $633,811
The number of new apartment listings coming onto the market in February totaled 478 a rise of 32% as compared to January although on a seasonally adjusted basis it represented a 4% fall. As with other sectors the relative level of new apartment listings remains subdued with the February 2011 level showing a 36% year on year decline.
The truncated mean asking price rose very slightly to $365,150 from $362,041 in January, this level is down 8% as compared to the recent 3 month average.
The representation of Auckland listings for apartment of the total for the country rose to over two thirds with 321 new listings with an asking price expectation of $324,716.
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 1,050 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 11,395 new listings in the month of January a total of 133 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 1.6m 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 1,050 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.
The full NZ Property Report for February 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 March 2011 will be published on this website on Friday 1st April 2011 at 10am.