The Unconditional Blog

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February property market remains subdued

Posted on: March 16th, 2011 | Filed in Featured, REINZ Monthly data

The latest data released by REINZ for property sales in February show that the property market is still somewhat subdued.

February is traditionally an active month as summer interest in property grows after the Christmas and summer vacation period finishes. It is usually the 3rd most active month in terms of sales despite its shorter period. It tends to see sales around 6.5% higher than an average month.

In February total sales reported by real estate agents around the country and collated by REINZ amounted to 4,502. This compares with 3,252 in January and 5,029 in February last year. Seasonally adjusting the figure shows a 12% rise from January.The chart below details the seasonally adjusted sales by month going back over 5 years and shows the market trend.

NZ Property sales seasonally adjusted 2006 to 2011

Recent sales levels have been low. The February 2011 figure is the lowest February total ever recorded going back to 1992, it is the first time sales in February have fallen below 5,000. The rolling 12 month sales now totals 55,362 down from 69,390 a year ago.

One contributory factor for the lower sales in February and very likely to be a key factor in future months is Christchurch. The February total sales in Christchurch was just 244 as compared to 519 in February last year. The Canterbury region is the second largest region of the country typically representing just under 15% of total national sales. The region suffered a significant slow down after the September quake and that is only likely to continue for many months to come.

Across the country sales have been variable as shown by this regional map of trends in sales volumes comparing February 2011 with February 2010.

NZ regional property sales chart for Feb 2011 REINZ

With just 4 of the 19 regions showing actual year-on-year growth in sales volumes the mood of the market is clearly subdued. The deep red colour for 12 of the 19 regions indicates where year-on-year volumes are showing more than a 5% decline.

The median price of sales reported by REINZ as shown in the regional chart below provides a window to regional price movements on a year-on-year comparison. The national median price did not move between February 2010 and February 2011 at $350,000.

NZ median property sales price by region for Feb 2011 REINZ

There were 4 regions showing median price increases of more than 5% year-on-year with 5 regions showing a fall in median price of more than 5% year-on-year.

Auckland with a 3.3% median price rise complemented with a 1.4% volume lift year-on-year would appear to be a lead region for the country as was commented on in the recent analysis of the Barfoot & Thompson data released earlier this month.

Article Discussion

  1. Ross says:

    Given that REINZ membership is now voluntary is there any data available indicating how many agencies are still members of REINZ as at January 2011 compared with January 2010?

    If there has been say a 15% or 20% drop in REINZ membership this would make a significant difference to the year on year figures as statistics returns would no longer reflect the true state of the industry.

  2. Ross

    I do not have any information from the Real Estate Institute (REINZ) on this issue. They have been as you rightly say a voluntary organisation since the inception of the new Real Estate Agents Act in Nov 2008. Prior to that date the organisation had compulsory membership by all licensed agents.

    Clearly if the number of offices reporting sales falls then the data is potentially weakened.

    As a company we are 50% owned by REINZ but not a member as we do not operate a real estate business – we are a web publisher.

    It would be my suggestion that the question you ask is directed to the REINZ directly.

  3. Hayden says:

    The Nelson median price looks wrong to me???? If you exclude Marlborough it should be $351,500 and not $315,500. Typo??? This would mean about a 2.1% drop year on year.

  4. Hayden

    You have an eagle eye – my apologies for reporting an incorrect number in the regional map of prices. The Nelson median price was $351,500. I have amended the regional map now on the site to correct this mistake. Thanks

  5. Liisa says:

    It would be interesting to know the number of properties taken to market versus how many sold. If fewer are available, there could be a high percentage of successful sales.

  6. Lisa

    The number of properties coming onto the market each month is detailed in the monthly NZ Property Report – for February the total was 11,395 – compared to 4,502 sales.

    This report is published on this website on the 1st day of the month for the data of the preceding month, so Friday 1st April will show the listings data for March.

  7. Ross says:

    Thanks Alistair

    Was at a meeting today where the CEO of REINZ stated that 90% to 93% of real estate agencies are still members and apparently those that are not members are likely to only comprise a small portion of total sales.

    It appears that perhaps the REINZ statistics are in fact a close reflection of current market volumes.

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