The June 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 June. 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 summary view of the report for June 2010 is that the market continues to witness a confidence amongst sellers, who are keen to market their properties, and who despite the relative stock of property on the market signal at this stage no further easing of asking price expectation.
A full print version of the NZ Property Report – June 2010 is published below and is available for download (1.4MB) and distribution.
Summary of the market – June 2010
The property market continues to attract sellers, witnessed by the relatively strong level of new listings with 11,106 coming onto the market in June. This level is up 16% on the same month last year. At that time in June 2009 the market was experiencing a listings’ shortage as well-financed buyers where negotiating hard with sellers keen to offload their property as property prices had fallen through late 2008 and early 2009, and uncertainty surrounded the future direction of pricing in a market so accustomed to property price appreciation. This situation is best seen from the perspective of inventory levels – 35 weeks of equivalent sales volume on the market a year ago compared to 45 weeks today.
The asking price expectation has moved little in the past month following the more significant drop between April and May. At the time this was judged to be a pragmatic reaction by sellers eager to “meet the market” in price terms and seek to attract what continues to be a weak level of buyer activity. The truncated mean asking price for June at $410,058 would seem to indicate a staunch position taken by sellers as the revised level they judge to be the “market”, not requiring further adjustments down in price at this time.
As briefly commented upon in last month’s report the budget announcement in mid May regarding property investment had the potential to impact the supply side of the market in terms of new listings in June and July. Whilst the level of new listings in June was up on a seasonally adjusted basis, the asking price expectation change would not be seen as reflective of the impact of rental properties coming onto the market, as this would likely be seen to drag down the truncated mean price whereas the case was that the asking price level edged up in June.
Asking price expectations of new listings coming onto the market rose very slightly in June following the fall in May. This would seem to indicate that sellers recognise the need to price according to the market conditions which show little signs of appreciation.
As compared to a year ago the May 2009 the price was up marginally by 1.7%, however the truncated mean price for the month of June is still 4.4% below the peak of the market back in October 2007.
The volume of new listings coming onto the market fell again in June to 11,106 – down 5% from May, however when the expected winter slow down is factored in with a seasonally adjusted factor the true state of the new listings market shows a 5% increase.
Over the 12 months to June 2010 a total of 145,920 new listings came onto the market. This was up 8% on the same 12 months to June 2009.
The level of unsold houses on the market at the end of June totaled 51,916 barely changed from the May total. This represented the equivalent of 45.3 weeks, as assessed on a seasonally adjusted basis.
The inventory levels are beginning to fall having risen to their peak in April at 51.6 weeks of equivalent sales.
Regional Summary – Asking Price Expectations
The asking price expectation of sellers in June reflected the current state of the market with only a marginal change following the fall in May.
Across the country the main view is that asking price expectation is coming under pressure with 11 of the 19 regions reporting asking prices which are below the recent 3 month average. The main metropolitan regions of Auckland, Wellington and Canterbury all showed an easing of asking price. There was a notable and significant increase in asking price in the Queenstown Lakes region from $523,760 to $642,710 coupled with a 29% increase in new listings.
Regional Summary – New Listings
As the regional map shows the overall sentiment of the market remains in the territory of a buyer’s market, a full 15 of the 19 regions are showing a year-on-year increase in new listings, with 10 regions posting increases of over 20%.
The larger regions of Auckland, Canterbury, Waikato and the Bay of Plenty all showed year- on-year increases of 10% or less, although the Wellington region bucked the trend with a 29% year-on-year increase in new listings.
Dividing the country up into metropolitan and provincial areas, the metro areas (3 key centers) are experiencing a lower rate of increase in new listings (+12%) as compared to provincial areas (+21%).
Regional Summary – Inventory
The picture of the regional property market is showing signs of changing. For most of the year- to-date the view of the market has been very clearly skewed to a strong buyers market. However as the chart shows there are some easing in the relative levels of inventory around the country.
The chart represents the actual inventory of unsold houses (measured in terms of equivalent number of weeks of sales) by region matched to the long term average (LTA) inventory level. An inventory level significantly higher than the LTA indicates a buyer’s market, with a figure significantly lower indicating a sellers market.
Whilst the predominant sentiment across the country is still to it being a buyer’s market; at this time 6 of the 19 regions are this month moving towards a more balanced market, with the Nelson region clearly bucking the trend with a bias to a seller’s market with inventory below the LTA, sales activity strong and asking price expectation steady.
The steady flow of new listings of lifestyle properties appears to have stalled in June. Having seen 4 straight months with a similar level of c.1,100 listings the new volume of listings in June dropped by 18% to 945. A key contributor to this decline was the Auckland region where a 44% month-on-month decline was seen with just 195 lifestyle listings in the month. Matched to this was Canterbury region with a 32% decline from 147 to 100.
The asking price expectation of these listings though remains strong with an increase (month-on-month) of 14% to $573,893, however the sector does experience variance in asking price due to the sample set and diversity of properties.
The number of new apartments coming onto the market in June remained pretty much in line with May with a total of 562 in the month. This represented an 18% year-on-year growth. Looking at the long term trend, the last 12 months has seen a 24% increase as compared to the prior period with the Auckland region as the largest market recording a 26% increase on a 12 month moving average basis.
The truncated mean asking price for the month was $367,216 which was down 5% on the most recent 3 month average and down 15% as compared to June last year. The Auckland region showed an asking price expectation of $331,958, down 6% on the recent 3 month average and 11% down on June last year.
Property Price Index
Comparing absolute house price sale data to listing price expectation is not a like-for-like comparison, however the alignment of trends can be useful as detailed 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 1,160 licensed real estate offices across NZ, representing more than 94% 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 11,106 new listings in the month of June, a total of 160 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 350,000 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 over 5,000 listings for all types of farms and agricultural land as well as over 11,o00 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 26,000 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 4,000 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 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 1,160 offices, the company represents over 94% of all listings from licensed real estate agents in NZ.
The full NZ Property Report for June 2010 can be downloaded here (1.4MB 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 July 2010 will be published on this website on Sunday 1st August 2010 at 10am.