The February 2012 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.
A full print version of the NZ Property Report – February 2012 is published below and is available for download (1.5MB) and distribution.
Summary of the market – February 2012
The property market across the country in aggregate has become more active in the past 9 months, in January alone sales were up 25% on a year ago and the final 3 months of 2011 saw sales up 22%. With this increasing demand the market as reflected from the supply side has been slow to respond, that is until February when listings were seen to come onto the market in a strong surge.
In absolute terms the level of new listings at 13,459 is up 18% on February last year and 14% up on a seasonally adjusted basis from January. This new rush of listings comes with a higher price expectation of sellers, eager to capitalize on what they see as a strong property market, the test will come as to whether these price expectations result in higher selling prices or if the level of buyer demand is prepared to meet these expectations. As has been noted before, this pressure in the market caused by a shortage of listing is very focused in the main cities with provincial regions still not witnessing anything like the level of buyer demand or activity as witnessed in the cities.
This new surge of listings appears in the main to be easing some of the pressure as measured by inventory levels with easing in those areas of the country feeling the shortage most significantly in recent months providing some comfort for those buyers who are eagerly waiting for the right house to come to market.
The seasonally adjusted truncated mean asking price of $426,575 for all new listings in February rose by 2.1% from January. This is a new record level for asking price up from the prior peak of $425,936 reached in October last year. The trend as seen in the chart covering the last 3 years shows a degree of accelerated growth in asking price over the recent 12 months as compared to 2010.
The level of new listings coming onto the market in February rose sharply with a total of 13,459 new listings coming onto the market. This represents a seasonally adjusted rise of 13.5% from January and is up 18.1% as compared to February last year.
On a 12 month moving average basis a total of 127,054 new listings have come onto the market since March 2011 as compared to 133,883 in the prior 12 month period, a fall of 5.1%.
The level of unsold houses on the market at the end of February (47,058) was up marginally as compared to January (46,976) as measured on a seasonally adjusted basis. This total includes houses, apartments and lifestyle properties on the market. However as a function of the increasing level of sales over the past 6 months, the inventory as measured in weeks of equivalent sales has fallen again from 36.4 weeks in January to 36.0 weeks in February. This compares to an inventory in February last year of 48.7 weeks, a fall of 26% in a year.
Regional Summary – Asking price expectations
The national (seasonally adjusted) truncated mean asking price expectation among sellers rose significantly to a new high of $426,575 in February.
Following the new record high for the national figure of asking price, both Canterbury and the Central North Island posted record highs. In the case of the Central North Island this is the highest asking price since October 2008, for Canterbury the pressure of listings shortages continues to put pressure on asking price.
Around the rest of the country 11 regions showed rises with Nelson the largest rise of 15.3% as compared to prior month on a seasonally adjusted basis. A total of 8 regions reported seasonally adjusted falls with the West Coast and Taranaki posting large falls of 8.4% and 7.3% respectively.
As has been seen in recent months the main three metro centers of Auckland, Wellington and Canterbury reported continuing rises in asking price.
Regional Summary – Listings
The general picture across the country for February was for a significant rise in new listings. Only one region, the Coromandel reported lower number of listings in February this year as compared to last year – down 19%. The remaining 18 regions reported rises of single digits right up to a massive 51% rise in Marlborough and 55% in Gisborne, with many regions reporting 30+% increases.
The tightest markets of the past 6 months being the major 3 cities saw some degree of pressure easing on limited supply as Canterbury saw a 31% rise with over 1,500 listings, however Auckland saw only a 16% rise and Wellington 10% rise. These increases do not match the year-on-year increase in sales which in January for Auckland was 28% and Wellington 18%.
Regional Summary – Inventory
The inventory of unsold homes on the market tightened again in February marginally slipping down to 36.0 weeks of equivalent sales from 36.4 weeks on a seasonally adjusted basis.
The change which has been witnessed over the past month has been to a more balanced market in many regions. As judged by the relative inventory to long term average, 7 regions are identified as being sellers markets with just 4 being buyers markets, leaving the remaining 8 as balanced markets favouring neither one party over the other.
The most extreme market pressure continues to be felt in the Canterbury and Auckland markets, but also in the Waikato and the West Coast, all of which are seeing levels of inventory when judged on rate of sale basis well below long term average. A noticeable change in February was the fact that in all 3 major cities the actual inventory level in weeks of equivalent sales and physical inventory did rise thereby showing that the market is responding the demand and shortage of supply.
Lifestyle property listings rose sharply in February reflecting the general property market. A total of 1,048 listings came onto the market, up 12% year-on-year and up 65% as compared to January. The truncated mean asking price for these listings rose by 10% as compared to the recent 3 month average to $643,647 – a new record high in asking price, surpassing the last peak of Feb 2009 at $633,811.
Across the country, four regions also recorded new peak asking price – Waikato, Hawkes Bay, West Coast and Canterbury.
Listings for apartments rose sharply in February with 538 being brought to the market, a rise of 88% as compared to January and 13% up on February last year. The truncated means asking price rose significantly from $349,736 in January to $402,278 in February, a 10% year-on-year increase and up 8% on the recent 3 month average.
The Auckland apartment market also witnessed a strong month with 329 new listings coming onto the market, up 84% from the very low level of January and up just 2% on February last year. The truncated mean asking price rose sharply to $390,021 from $314,757 in January representing a 20% year-on-year increase and a 14% increase on the prior 3 months.
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 from licensed real estate agents, 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 1,000 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 13,459 new listings in the month of November, a total of 730 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.
The core data for the NZ Property Report is seasonally adjusted to better represent the core underlying trend of the property market in NZ. In preparing this seasonally adjusted data Realestate.co.nz is grateful for the assistance of the New Zealand Institute of Economic Research (NZIER) who use an X12 ARIMA methodology to calculate seasonally adjusted data.
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 110,000 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 1,000 offices, the company represents over 95% of all listings from licensed real estate agents in NZ.
The full NZ Property Report for February 2012 can be downloaded here (1.5MB 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 2012 will be published on this website on Sunday 1st April 2012 at 10am.