The September 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 September. 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 September 2010 report tracks a key month as the market heads into spring. Whilst the level of new listings is up, the extent of the rise does not reflect a buoyant enthusiasm by sellers. Equally whilst the volumes may not be massive the expectation of asking price is holding firm, up slightly on the prior month and short term average. The key determinant of the market though remains the levels of unsold houses which at 11 months is high.
A full print version of the NZ Property Report – September 2010 is published below and is available for download (1.1MB) and distribution.
Summary of the market – September 2010
The much anticipated spring surge in new listings appears to have failed to eventuate with the number rising by just 1% on a seasonally adjusted basis from August. The September total of 10,559 new listings is down by 17% as compared to Sep 2009 (12,674) and down 12% as compared to Sep 2008 (11,966).
The Canterbury earthquake did impact the new listings for September. However it was not as significantly as might have been anticipated. The total of 1,211 new listings added in the month across the region was down 26% on the August total of 1,354; but making adjustments for seasonality and evaluating the rest of the country performance on new listings it would appear that the impact is of the order of 20% less listings across the Canterbury region than would have been expected; this would amounting to around 290 listings coming onto the market.
The continued pressure in the market remains the high level of inventory of unsold houses; this rose again in September to 47.5 weeks despite the significant lower absolute level of new listings. Inventory levels as measured in terms of equivalent weeks of sales are up 48% year-on-year and a long way adrift from the long term average of 39 weeks.
The asking price expectation across the country crept up slightly allowing for the seasonal rise which is evident at this time of year as properties are listed to meet the seasonal activity. This 1% rise on a seasonally adjusted basis would seem to signal a confidence amongst sellers, that buyers who have for so long been sitting on the sidelines will become more active.
The asking price expectation of new listings increased again in September up to $411,745 from $403,423 in August. This represents a 2% fall as compared to September last year. Against recent 3 month period the price represented a 2% increase.
The current asking price still lags 4% behind the peak of the market – some 35 months ago now in October 2007.
The volume of new listings rose between August and September as is expected at this time of year. However the levels failed to spark a recovery to levels seen in prior years at this time.
The trend reflects what has been a subdued year in listings with just 105,022 in the 9 months of the year. This is not significantly above the 2009 total for the same period of 97,660. By comparison over the first 9 months of 2008 126,275 new listings came onto the market.
The level of unsold houses on the market at the end of September totaled 51,035 up 2% from August. This represented the equivalent of 47.5 weeks, as assessed on a seasonally adjusted basis.
The continued subdued level of sales is holding inventory at such high levels despite this slower level of new listings, thereby adding to pressure on the market.
Regional Summary – Asking price expectations
The national asking price expectation showed a 1.8% increase as compared to the recent 3 month average. However underlying this national picture is a wide variation of price movements.
There were more regions showing increases this month (13) than falls (6). The largest rise was in Otago which at $293,362 recorded an all time high in asking price surpassing the prior peak in October 2007. Other large rises were seen in Central North Island, Manawatu and Gisborne although these were far from peak prices.
On the declining side there were some large falls seen in the Coromandel, Hawkes Bay and largest of all at 14% decline in the Queenstown Lakes region. This latter region does see significant volatility with a peak in July 2007 of $668,973 and a low of $479,699 in February 2009. The current level of $536,592 is therefore more reflective of a midpoint.
Regional Summary – Listings
The predominant colour of the regional map for September would indicate that the future prospects for the property market could lead to a seller’s market. The level of new listings is significantly below last year in all but one region – Southland.
This significant decline in new listings, with fully half of all regions showing greater than 20% year-on-year decline is however being balanced off with lower year-on-year sales and this is where the telling indicator of inventory levels shows a true picture of the market.
Allowing for the specific issues experienced in Canterbury the listings in the two other main metro areas saw less extreme falls in new listings coming onto the market.
Regional Summary – Inventory
With a national level of 47.5 weeks the regional perspective of inventory of unsold homes remains well above long term average with just 2 regions (Gisborne and West Coast) dipping below long term average.
At the extreme, the Coromandel region would have to take the award. The current stock of property on the market totals 2,002 listings. Set against this stock is a sales volume in August of 18, following a July total of 19 property sales. These extraordinary sales levels mean that the current inventory represents 289 weeks of sales – or over five and a half years.
The Nelson region which has been seeing some shift to a seller’s market in prior months has fallen back as inventory has grown to 32 weeks up from the long term average of 28 weeks.
The main metro regions of Auckland and Wellington whilst not in extreme levels of inventory both show a reasonable level of inventory above the long term average.
Lifestyle properties certainly picked up in September with 980 new listings. This was up from 840 in August, although as compared to last year the seasonal increase is not as significant. On a rolling 12 month basis lifestyle property listings are up 7.4% with 12,322 listed in the past 12 months.
The asking price expectation of these new listings was $527,170 which was on all comparative metrics was significantly lower. As against the recent 3 month period it was down 5.1%, against September 2009 down 12% and down 5% compared to August 2010.
There was no appreciable seasonal lift in apartments coming onto the market in September. A total of 506 new apartment listings were added in the month. This was down 2% from the prior month and down 16% on the same month a year ago. The relative perspective for the Auckland market was 345 new listings, down just 1% year-on-year.
The asking price expectation was fairly firm with a truncated mean of $362,427 which is 0.4% up on the recent 3 month period, but down 13.4% on the same month last year. Auckland apartments equally showed recent stability off just 0.5% as against recent 3 months and down 12.6% as against September 2009.
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 1,130 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 10,559 new listings in the month of July, a total of 177 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 118,000 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 1,130 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.
The full NZ Property Report for September 2010 can be downloaded here (1.1MB 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 October 2010 will be published on this website on Monday 1st November 2010 at 10am.