NZ Property Report – May 2012

The May 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 May. 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 – May 2012 is published below and is available for download (1.2MB) and distribution.

A video interview of the NZ Property Report for May with Bernard Hickey of Interest.co.nz provides a concise 6 minute insight into the market across the country.

Summary of the market – May 2012

The message in the property market for the past 6 months at least, has been that there is a shortage of listings. In the major metro areas of Auckland and Canterbury this shortage has been more acute especially at a suburb level. It appears from the May data on the supply side of the market that this message has finally got through to sellers. The level of new listings in May was counter-seasonal; when we normally see a slowing of new listings coming onto the market heading into winter we actually saw a rise, and quite a significant rise – 16% increase on a seasonally adjusted basis.

This rise in new stock has lead to a fast adjustment in a number of provincial regions where the market was firmly biased to sellers and is now showing a more balanced market. This however is not the outcome in Auckland and Canterbury where despite this surge of new listings, the inventory as measured against the rate of sale has actually fallen, demonstrating the levels of activity in these markets where property is selling fast.

The unseasonal rise in listings has certainly come with an ensuing surge of confidence in those new sellers – they have signaled this confidence in the asking price expectation, which has again set a new record level. This rise was most accentuated in the two key markets of Auckland and Canterbury which both set new record levels of asking price.

The challenge for the market in the coming winter period will be if the surge of listings continues and what impact that will have on the inventory and the ability for the buyer demand evident through the summer/autumn to continue, potentially less of an issue in the major metros than provincial regions.

Asking Price

The seasonally adjusted truncated mean asking price for listings in May set a new record high of $435,887, this represents a significant increase from the prior peak in March of this year of $429,865. The month-on-month increase of 2.8% is the highest single increase since Sep 2009. As compares to a year ago the truncated mean asking price is up 4.5%.

New Listings

The level of new listings coming onto the market in May rose sharply with a total of 11,544. This represents a seasonally adjusted 16% increase. The increase year-on-year is 17%.

On a 12 month moving average basis a total of 129,711 new listings have come onto the market since June 2011 as compared to 127,843 in the prior 12 month period, a rise of 1.5%. This is the first moving annual total increase in over a year.

Inventory

The level of unsold houses on the market at the end of May (46,016) was down as compared to April (46,948) as measured on a seasonally adjusted basis. The inventory as measured in terms of equivalent weeks of sales shows a further upturn to 35.7 weeks from 33.7 weeks last month. This is the third straight month with increasing inventory – reversing what had been a 6 month consistent decline from October through to March of this year.

Regional Summary – Asking price expectations

The national (seasonally adjusted) truncated mean asking price expectation among sellers rose significantly in May by 2.8% to $435,887.

Across the 19 regions of the country the price movements are varied with 11 showing increases and 8 decreases. The major movement are very evident on the East Coast with Gisborne, Hawkes Bay and Manawatu / Wanganui showing steep declines, joined by the West Coast. In contrast the five regions of Wairarapa, Northland, Coromandel, Nelson and Taranaki showed big increases, in the case of the latter region an increase of 15%.

The major metro regions showed slight movement with Auckland being the largest with a 1.7% increase to set a new record asking price of $578,533. Canterbury with a seasonally adjusted increase of just 0.5% though did also set a new record asking price at $383,504. Wellington by contrast was down 0.1% in seasonally adjusted asking price at $429,836 which is 5% below the peak asking price of Feb 2011.

Regional Summary – Listings

Listings volumes coming onto the market in May was well ahead of the seasonal trend which tends to see a slow down as the market heads towards winter. Across the country only one region (Central North Island) showed a decline in new listings as compared to last May.

Significant year-on-year increases of over 20% were seen in 9 of the 19 regions. The largest increases were in the West Coast (75%), Taranaki (72%), Northland (56%) and the Waikato (43%).

It is interesting to align the chart of new listings by region to the inventory by region. Most striking is the fact that the two regions facing the greatest shortage in listings being Auckland and Canterbury saw some of the lowest rise in new listings in the month, well below the national average.

Regional Summary – Inventory

The inventory of unsold homes on the market rose again in May, creeping closer to the long term average as the market re-balances.

This re-balancing is however not occurring in the two major markets of Canterbury and Auckland where the inventory continues to fall. Both Auckland and Canterbury have also reached new record 5 year lows in inventory and now both are over 33% below their respective long term average.

Noticeable outside of these regions is the extent to which the remaining 17 regions are edging out of tight sellers’ markets into more balanced markets and the emergence of some buyers markets. As compared to April when there were 4 provincial markets under strain of a shortage of listings to this month with none. The majority of provincial markets are fairly well balanced between buyer and sellers providing a good balance heading into the slightly quieter winter months.

Lifestyle

Lifestyle property listings rose in May in line with the trend of total listing. A total of 978 listings came onto the market, up 16% year-on-year and up 17% as compared to April. The truncated mean asking price for these listings rose 1.2% as compared to the recent 3 month average to $655,740 – taking the level to another record high in asking price, surpassing the peak attained over the last 3 months. Across the regions, Wellington recorded a new record high of $905,100.

Across the country, year-on-year comparison of new listings were up significantly in the Bay of Plenty (+96%), Taranaki (+92%) and Northland (+64%).

Apartments

Listings for apartments rose in May with 495 being brought to the market, on a year-on-year basis listings were up 22%. The truncated mean asking price of new listings slipped to $371,703 in May from $384,861 in April, representing a 3% year-on-year decrease and down 3% on the recent 3 month average.

The Auckland apartment market followed the national trend with 288 new listings coming onto the market, up 14% from April and also up 8% from May last year. The truncated mean asking price of new listings rose to $362,421 from $359,196 in April representing a 5% rise 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 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 11,554 new listings in the month of May, a total of 373 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

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 May 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 June 2012 will be published on this website on Sunday 1st July 2012 at 10am.