The June 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 June. 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 – June 2012 is published below and is available for download (1.2MB) and distribution.
Summary of the market – June 2012
It seems that just as we sensed a stabilizing of the property market in terms of new listings responding to the growing demand as was witnessed in May, the market has swung again and the ever present property shortage just got worse. Worse by not just a small measure! – the current level of inventory is down to the lowest witnessed in 4 years. Across the country there are no regions for which the state of the market could be assessed as even a slight buyers’ market.
This situation has arisen as a consequence of very strong sales in May – the seasonally adjusted total of 6,154 was up 26% on April. In total the first 5 months of this year show sales up 25%. At the same time listings over the same period are only up 9%. To put this into perspective the number of properties on the market across the country at this time is 43,691. If the rate of sale was to continue and no new listings were to be added that stock would be sold out by the last day of December this year. A year ago there were 47,738 properties on the market, at that time the then rate of sales would have meant that it would have taken until the middle of March next year to sell out all that stock.
The months of June, July and August are proportionally the lowest of the year both in absolute terms but also in relation to sales. This 3 month period represents 22.4% of the total listings for the year as opposed to 24% of the sales for the year. If this traditional seasonal situation is experienced this year and the rate of sale continues at current levels it is likely that the NZ property market will reach critically low inventory in absolute terms as the market moves into the key spring season in just 2 months’ time.
The seasonally adjusted truncated mean asking price for listings in June eased from the record high of $435,887 set in May to a June level of $424,315. The month-on-month decrease of 2.7% takes the month level to 1.6% up on June last year. As can be seen from the chart the easing in the month does not significantly affect the trend line which continues to show a steady rise over the past 18 months.
The level of new listings coming onto the market in June fell back to 9,689 from 11,544 in May. This represents a seasonally adjusted fall of 8% demonstrating that the sellers are still apprehensive of listing their properties despite the record low inventory.
On a 12 month moving average basis a total of 130,289 new listings have come onto the market since July 2011 as compared to 125,848 in the prior 12 month period, a rise of just 3.5%.
The level of unsold houses on the market at the end of June (44,787) was down as compared to May (46,016) as measured on a seasonally adjusted basis. The inventory as measured in terms of equivalent weeks of sales shows a significant drop from 35.7 last month to 29.8 weeks this month. This is one of the largest single month drops since the peak of the market for inventory in October 2010.
Regional Summary – Asking price expectations
Across the 19 regions of the country the asking prices generally eased which considering the low inventory across the regions is seen as somewhat surprising. The biggest falls were seen in Taranaki, Northland and the Central Otago / Queenstown lakes area – all falls of 10% or greater on a seasonally adjusted basis. In total there were 11 regions reporting falls in asking price on a seasonally adjusted basis, with just 8 showing increases.
The largest regional increase was seen in Gisborne; a region which does witness volatility as a function of scale. Most notable region reporting an increase was Canterbury which showed a 1.6% seasonally adjusted increase to set a new record level of asking price expectation off the back of a record low level of inventory.
Regional Summary – Listings
The regions showing the tightest level of inventory – Auckland and Canterbury showed increases in new listings, however at 11% and 4% increase respectively these levels fail to alleviate the very low inventory.
Three regions – Taranaki, Manawatu / Wanganui and Wiararapa did see strong growth on a year-on-year basis, all up over 25%.
The Wellington market; which had recently seen some growing inventory reported a 6% fall year-on-year with just 691 new listings.
Coromandel reported the biggest fall, with just 156 new listings down 33% on June 2011.
Regional Summary – Inventory
The key metro markets of Auckland, Wellington and Canterbury all show inventory below 20 weeks of equivalent sale – in the case of Canterbury and Auckland these are the lowest level going back over 4½ years at 16 weeks and 18 weeks respectively.
In addition to these 3 metro regions a further 6 regions are witnessing levels of inventory significantly below their long term average as indicated by the dark blue boxes on the chart.
There are just 5 regions where inventory is sitting just above the long term average – Central North Island, Gisborne, Marlborough, Southland and Taranaki. All of these have seen a fall in inventory in June and therefore are favouring sellers with an anticipation that the traditional winter shortfall of listings will continue through until September..
Lifestyle property listings fell in June in line with the trend of total listing. A total of 808 listings came onto the market, down 2% year-on-year and down 17% as compared to May. The truncated mean asking price for these listings fell 3.1% as compared to the recent 3 month average to $631,579 – easing from the record high in asking price set in May.
Across the country, Northland recorded a record low of new listings with just 48 added in the month as compared to a long term average of 120. Strong growth was seen though in Otago and the Manawatu with year-on-year growth of 23% and 110% respectively.
Listings for apartments eased in June from May with 439 being brought to the market, on a year-on-year basis listings were identical to June 2011. The truncated mean asking price of new listings slipped to $360,618 in June from $371,703 in May, representing a 9% year-on-year decrease and down 4% on the recent 3 month average.
The Auckland apartment market followed the national trend with 271 new listings coming onto the market, down just 1% from May and also down 6% from June last year. The truncated mean asking price of new listings fell significantly to $319,979 from $382,064 in May representing a 11% fall 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 9,689 new listings in the month of June, a total of 193 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.
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 June 2011 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 July 2012 will be published on this website on Wednesday 1st August 2012 at 10am.