It is late January and I must admit the Unconditional blog has been a bit quiet for the past few weeks as an extended vacation has meant I have not addressed an update on the NZ Property market.
Well, now back firmly in the chair, I intend to address this issue by providing some key facts of assistance to any prospective buyer or seller as well as those fond of keeping a close eye on the property market.
The first data of 2011 will be published next Tuesday, the 1st of February when the NZ Property Report from Realestate.co.nz is published. The data will detail the level of activity of new listings coming onto the market in the first month of this new year. Suffice to say at this stage it is looking to be pretty quiet as far as new listings are concerned.
Closing out 2010 data from the Real Estate Institute showed sales in December of 4,397 properties, this was though up a seasonally adjusted 7.1% from the November sales; which itself was up a seasonally adjusted 23% from October.
However despite this recent pick-up in sales the total sales in the full calendar year were just 56,303. This figure is a mere 175 properties more than the lowest year since recording data back to 1992 (that prior lowest was 2008). It is very clear from the chart below the new levels of property sales of the past3 years since the turning point in the market.
Whilst the calendar year data shows the big picture it is inadequate in highlighting trends. For this I favour the seasonally adjusted monthly sales tracking as detailed in the chart below tracing the past 5 years by month since January 2006.
In separating key periods I have tried to highlight the trends. The start of 2006 saw a fairly stable period for well over a year, right up to the turning point in the market in early 2007. The next year saw a significant fall to late summer 2008. Then followed a 9 month period of stability – a sense of adjustment before a resurgence occurred through a 7 month period in mid 2009. Unfortunately that resurgence ran out of steam as Spring 2009 appeared and the market has subsequently been sent backwards for the next 12 months.
To call a turning point is risky, but the chart does show some favourable signs through the past 3 months. As ever it is better to reflect after 6 months than just one quarter.
Sales volumes are a key indicator of the health of the market from the perspective of activity (as without buyer you have no market!). The level of demand is often best represented by price movements and to close out 2010 it is worth looking at what the trends are for property sales price. Using the Stratified House Price Index provided by the Real Estate Institute in consultation with the Reserve Bank as the measure, the chart below tracks the national price over the past 4 years.
The December stratified median price was $360,660 down from the November levels and as shown from the chart, down 5.3% from the peak price in the market back in November 2007. The selling price over the past 12 to 15 months has been tracking in a very narrow band from $370,000 to just below $357,000, there does appear to be a slight decline, but given the split axis this trend is very slight and it might be better to call these prices stable. Which when set against global property price movements of the past couple of years would be seen as favourable by the more optimistic among those property watchers.