The June 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 May. 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.
A full print version of the NZ Property Report – June 2011 is published below and is available for download (1.0MB) and distribution.
Summary of the market – June 2011
What began last month as an early trend towards a sellers market has taken on a faster pace through June. Nationally whilst the inventory levels hover just above the long-term average of 41 weeks, key regions of the country are now firmly set in a sellers market. This situation has the potential to be exacerbated by the traditional reluctance of property owners to list their homes through the winter period. During the winter, sales per month tend to drop by around 5% as against a normal month, however new listings tend to fall more significantly by up to 15% as compared to a normal month.
Heading into the winter period with a growing number of regions seeing inventory levels below long term average could well result in elevated buyer demand with a potential to see property price appreciation. Those regions are Auckland, Queenstown, Bay of Plenty, Waikato and Otago.
Countering this potential for price appreciation is the fact that in June the asking price expectation of those new listings coming onto the market at $415,053 showed no change as compared to May and in fact represented a 2% fall in price as compared to the recent 3-month period.
The truncated mean asking price for all new listings in June rose very slightly from $414,308 in May to $415,053. On a seasonally adjusted basis the asking price rose just 0.8% in the month indicating a degree of caution amongst sellers.
The overall trend of the past 2 years continues to show a slow but steady strength in asking price expectation.
The level of new listings coming onto the market in June fell again to 9,111. This represented a 18% year on year decline but a 2% seasonally adjusted rise from May.
On a 12 month moving basis the number of new listings in the past year totals 125,848 as compared 145,920 for the same period a year ago – a fall of 14%.
The level of unsold houses on the market at the end of June continued to fall from prior months. June reported 47,738 down from 48,352 in May and 50,398 in April.
The recent relative strength of sales as seen in March through to May has now stared to see a clearing of what has been a high level of unsold houses on the market over the past 18 months. Heading into Winter, a time of traditionally weaker listing will likely see this inventory level fall further in coming months.
Regional Summary – Asking price expectations
The asking price, having fallen in May barely changed in June. Across the regions there is certainly some variances. A total of just 6 regions saw an increase in asking price expectations as compared to 13 showing falls.
The scale of some of these movements was significant, even outside of the smaller regions, which tend to exhibit large variances. Most noticeable were falls of greater than 5% in Wellington, the Hawkes Bay, Taranaki and Otago. The largest asking price rises of greater than 5% were seen in the Bay of Plenty and Coromandel region, the latter still witnessing high inventory and as such is very much stuck in a buyers market. The biggest movement in asking price this month was seen in Southland with a 6.8% increase as compared to the recent 3-month average.
Regional Summary – Listings
The regional perspective of new listing is very clear this month with one solitary region showing a rise in new listings comparing June 2011 with a year earlier. The Central North Island as well as seeing a rise in new listings is experiencing a buyers market with inventory of unsold properties exceeding long term average.
The majority of regions (13 out of 19) saw double-digit falls of new listings on a year-on-year basis with the biggest falls seen in the West Coast, Gisborne, Bay of Plenty, Marlborough, Canterbury and Wiararapa.
Two regions in June reported the lowest levels of listings going back to Jan 2007, they were Northland with 352 listings and Wiararapa with 117 listings.
Regional Summary – Inventory
The levels of inventory of unsold homes on the market fell further in June. In the space of just 3 months the levels have fallen from significant highs to be very close to long term average for many regions of the country.
For 2 years the predominant look of the regional inventory map has signaled a buyers market. In June there were 7 regions on or below their long-term average for inventory of properties on the market.
The most significant regions experiencing this shift to a seller’s market are Auckland and Queenstown; now joined by the Bay of Plenty, the Waikato and Otago. Not far behind the regions of Nelson, Wellington, Canterbury and the West Coast all of which are edging to a turning point in the market with more balance between buyers and sellers.
That still leaves 9 regions, all of which are provincial NZ firmly in a buyers market with existing inventory well above long term average.
The level of new listings of lifestyle property coming onto the market in June fell by 4% on a seasonally adjusted basis from May. A total of just 829 new properties were listed with a truncated mean asking price of $554,864. The asking price was down 1% as compared to the recent 3-month average, and down 3% as compared to prior year.
On a rolling 12-month average basis new listings are down 10.5% with 11,346 listed in the past 12 months compared to 12,679 last year.
Listings of apartments showed a 21% increase on a seasonally adjusted basis as compared to May with 439 new apartments coming onto the market. The truncated mean asking price for these new listings was $397,747, which was up 4.0% on the recent 3-month average, and up 8.3% as compared to June 2010.
In the Auckland apartment market, which represents over 60% of the market there were 274 new listings with an asking price of $383,980. The new listings shows a rise of 17% on a seasonally adjusted basis, and a 3% rise when judged on a year-on-year basis.
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 1,020 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 9,111 new listings in the month of June a total of 166 listings have been excluded due to anomalies. The land area of the property defines the categorisation of Lifestyle 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 1.6m 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 1,020 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.
The full NZ Property Report for June 2011 can be downloaded here (1.0MB 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 2011 will be published on this website on Monday 1st August 2011 at 10am.