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NZ Property Report – July 2012

Posted on: August 7th, 2012 | Filed in Featured, NZ Property Report

The July 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 July. 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 96% of all property movements in the NZ market as managed by licensed real estate agents.

A full print version of the NZ Property Report – July 2012 is published below and is available for download (1.2MB) and distribution.


 

Summary of the market – July 2012

The month of July is the midpoint of winter, traditionally the lowest season for new properties coming onto the market. Winter generally represents just 22% of the total listings in the year, yet the same 3 months represent traditionally 24% of sales demonstrating a key factor in the continuing tight property market especially in the main centres of the country.

Set against this backdrop the level of new listings could be seen as a ray of good news as the total number stayed up and did not fall significantly, representing as they did a 5% year on year increase and bringing to the market over 9,400 new listings.

There is though no doubt that the message to sellers appears to be getting through when it comes to price expectations. The latest asking price level for July is up 3.7% as against last year. The latest sales prices as reported by REINZ in their stratified mean sales price for June was of a year-on-year increase of 5.3%. On this basis sellers appear to be realistic in pricing in to their asking price a smaller reflection of the current level of house price appreciation.

Across the country the level of inventory of property on-the-market remains low as measured against historical average. The next 3 months heading out of winter and into spring will see the seasonal increase in activity in both listings and sales. The key issue will be to what extent the rise in new listings can take any heat out of the tight property markets in the major centers and other pockets of property activity across the country

 

Asking Price

The seasonally adjusted truncated mean asking price for listings in July rose again following a slight dip in June. The July figure of $429,181 was up just 0.8% on a seasonally adjusted basis from June. It represents a 5% year-on-year growth in the asking price as compared to July last year. The trend as seen in the chart opposite continues to show strength in seller expectation on the back of low listings and strong demand in the main centers.

 

New Listings

The level of new listings coming onto the market in July barely changed from June with 9,411 listings in the month from the 9,588 in June. This represents a 1% decline on a seasonally adjusted basis. As such this level of growth year-on-year is not matching the pace of sales growth, which year-on-year is over 18%.

On a 12 month moving average basis a total of 130,633 new listings have come onto the market since August 2011 as compared to 124,228 in the prior 12 month period, this represents a rise of just 5.2%.

 

Inventory

The level of unsold houses on the market at the end of July (44,729) was barely changed as compared to June (44,787) as measured on a seasonally adjusted basis. The inventory as measured in terms of equivalent weeks of sales showed a slight rise from 29.8 last month to 31.0 weeks this month. This still leaves the level well above the long-term average of 40 weeks.

 

Regional Summary – Asking price expectations

The national (seasonally adjusted) truncated mean asking price expectation among sellers rose slightly in July by 0.8% to $429,181.

Across the 19 regions of the country asking prices showed a significant range of variances. The main 3 centres all showed rises with Auckland reporting a 3% increase marginally beaten by Wellington at 3.1%. Both of these centres though failed to set a new record high asking price, that was left to Canterbury which for the 3rd consecutive month set a new record at $393,433 up 0.9% from June on a seasonally adjusted basis.

In total 9 regions reported asking price rises with the Coromandel the largest riser up 8.6% to $421,153. Of the 10 regions witnessing asking price falls on a seasonally adjusted basis there were 4 reporting greater than 5% with Northland and Nelson reporting over 10% falls, the latter seeing a 16.8% fall.

 

Regional Summary – Listings

Overall listings volume was steady on a national basis, however across the regions there were more regions showing increases than falls.

There were 13 regions reporting year-on-year rises with Northland, Manawatu/Wanganui, Marlborough and West Coast all seeing increases of more than 20%.

Just 6 regions reported new listings lower than for July last year with Nelson being the region to report a fall off of 22% with just 165 listings reflecting the lowest level of new listings since the data reporting began at the start of 2007.

Of the main centres Auckland saw a healthy increase year-on-year of 10% whilst both Wellington and Canterbury saw new listings fall compared to July last year. The latter being a region continuing to be under pressure to meet buyer demand.

 

Regional Summary – Inventory

The market sentiment remains favouring sellers nationally with inventory of houses on the market below long term average based on equivalent rate of sale. However unlike in June when the picture was consistently in favour of sellers, some rebalancing has been seen.

Two regions (Taranaki and Wairarapa) showed increases in inventory of homes on the market taking them above their respective long-term average. In addition three other regions (Coromandel, Manawatu/Wanganui and Southland) sit close to their respective long term averages indicating a more balanced market.

These 5 regions aside, the remaining 14 regions all remain seller’s markets with the greatest strain being felt in the 6 regions which are marked in dark blue which includes the main centres of Auckland and Canterbury which remain under pressure from low listings as measured against sales activity.

 

Lifestyle

Lifestyle property listings fell in July. A total of 704 listings came onto the market, up 12% year-on-year but down 13% as compared to June. The truncated mean asking price for these listings fell just 1.1% as compared to the recent 3 month average to $641,44 however up 1.2% from the June level of $634,09.

Across the country, Central Otago Queenstown lakes recorded a new high for lifestyle listings of $1,593,000. Around 23 new lifestyle listings a month are listed in the region, this high represents a 20% increase in the prior record high set just 3 months ago in April at $1,313,516.

 

Apartments

Listings for apartments in July were nearly identical to June with 455 being brought to the market, on a year-on-year basis listings were up 2.1%. The truncated mean asking price of new listings slipped to $356,762 in July from $381,578 in June, representing a 94% year-on-year decrease and down 6% on the recent 3 month average.

The Auckland apartment market however was stronger with 323 new listings coming onto the market, up 10% on July last year and up 12% on the month of June. The truncated mean asking price of new listings fell to $344,479 from $362,550 in June representing a 6% fall on the prior 3 months.

 

Notes:

Truncated mean

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.

 

Methodology

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 96% 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 9,411 new listings in the month of June, a total of 315 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.

 

Seasonally adjustment

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.

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 July 2012 can be downloaded here (1.2MB 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 August 2012 will be published on this website on Saturday 1st September 2012 at 10am.

Article Discussion

  1. The month of July in our Pt Chevalier and Grey Lynn offices was as busy as any previous summer month! Many homes have sold in excess of $200,000 above what was paid for them during 2009/2010 and it looks like we could easily see prices increase another 10% over the next 6 months in the Ponsonby to Pt Chevalier area. Interest rates of 4.99% fixed for one year will tempt many more to purchase.

  2. Thanks for the update and great read!

  3. […] here’s a quick pun-free look at the always excellent NZ Property Report and other bits of real estate data for […]

  4. Gordon Brown says:

    Once again, I have to completely disagree with you that there is a “steady flow of new listings”. If new listings have dropped by between 2 & 10% in 3 of the four main centres, how can there be a steady flow of new ones? There is a dearth of new listings because we are still in a buyers market and sellers are scared of listing because they won’t get their money back.

  5. Gordon,

    Thanks for your comment – a couple of comments in response.

    The reference to the idea of a steady flow of new listings is a reflection of the total market as the data shows individual regions are showing some significant variances. Auckland, the biggest market has seen a 10% year-on-year increase. Certainly Wellington is down. Nationally the 5% increase is an increase.

    I would have to correct you on the term buyers market you use. The dearth of new listings favours sellers over buyers so is leaving us in a sellers market. I am not sure why you say that sellers are scared of listing because they won’t get their money back. Both asking and sales prices are up year on year delivering modest capital gain for those selling in today’s market.

  6. J Thane says:

    Hi,
    I was wondering when one property is uploaded multiple times or the same property by a number of different listing agents, is each upload counted as a separate listing?
    Thanks.

  7. J Thane

    Thanks for the question – always happy to explain the processes we go through to create the report.

    When we report listings we are reporting the total number of unique listing added to the website in the month. Now a unique listings could be the same house listed by Agent A and Agent B in the month. We do not have any problem with listings being uploaded multiple times as our systems identifies a unique ID to a property (address) and an agent.

    We chose to report listings rather than properties and this has been consistent since we started the report is that the scale of new listing should reflect the dynamics of the market – in a buyers market sellers may well list with more than one agent hoping to capture wide interest, this will have an effect to increase listing numbers slightly. In a sellers market as we are now in the number of multiple listed properties tends to fall and at this moment less than 8% of all listings on the site are multiple listings, many of which have been on the market for more than a year.

  8. J Thane says:

    Thanks for taking the time to clear that up for me Alistair, I appreciate it.

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