The Unconditional Blog

The impartial voice of the industry

 
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Property sales have clearly turned a corner

Posted on: January 26th, 2012 | Filed in Buying / Selling a home, Featured, REINZ Monthly data

The property market in NZ starts 2012 in better shape than it has for the past 5 years. It would not be too optimistic to say that the industry, certainly in terms of volume sales has turned a corner. Some parts turned that corner 6 months ago (notably Auckland) whilst some will take a few more months before witnessing this change.

In the 12 months of 2011 a total of 61, 269 properties were sold across the country as reported by the Real Estate Institute. This represented a modest 9% growth as compared to 2010. The word modest is most appropriate when the volume of sales is viewed against the perspective of the past 20 years.

20011 was much improved from both 2008 and 2010 which represented the lowest sales volumes of the past 20 years, barely struggling to reach half the sales volumes of the peak years of 2002 to 2007.

 

As ever 20/20 hindsight is a powerful tool and applying it now applies a clearer view on those heady days and reflect that this period was a bubble – one unlikely to be repeated for many years, if ever again.

What drove that bubble and created that frenetic pace of market activity?

A number of factors were conspicuous: the rise in investor market activity as the NZ economy grew through global growth and strong immigration, the banks were certainly relaxed about deposit requirements and other investment options showed far less appeal or tax or leverage advantage. That convergence of events lead to a virtuous cycle (depending on your perspective as many would argue a fateful and perilous cycle), whereby those on the treadmill of property ownership felt richer as asset values as a surrogate of property prices grew at a heady 10+% a year rate.

The important thing to see is that if this heady period is ignored as an aberration, the current sales levels still sits well below the levels of the market through the 1990’s. This is the validation to the proposition that the industry has turned a corner. Average annual sales through 1993 to 2001 was 78,000 a year – that means the current year up 9% vs 2010 is still down 22% from the average of the 90’s.

This perspective is seen even clearer when property sales are matched to the growing population of NZ and the number of houses. It makes logical sense that as the population grows, the housing stock must grow and thereby so must sales as people always need to relocate for the logical need of jobs, lifestyle, financial, schools, family etc.

Over the period from 1993 to 2001 the number of houses in NZ grew from just under 1.2 million to 1.37 million and has continued to grow (even allowing for the depressed construction market of the last 4 years) to around 1.55 million today – that is around 350,000 more houses in NZ today than there were at the beginning of the 90’s. Yet the volume of property sales are 22% less!

This conundrum is best visualised in the chart below which tracks the % of property sales on a moving annual total basis against the total number of properties in NZ.

The chart provides a further validation to the belief that property sales are likely to see growth in the coming years. The current rate of sale is 4% of all properties sold per year. The long term average for the past 20 years is 6%, during the 90’s the rate was 6.2%.

If the rate of sale were to return to the 90’s levels we would see a 56% rise in sales to 95,000. If we only saw a rise to the lowest point of the 90’s at 4.7% we would still see a rise in sales of 73,000 a rise of 19%.

 

 

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NZ Property Report – December 2011

Posted on: January 1st, 2012 | Filed in Featured, NZ Property Report

The December 2011 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 December. 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 95% of all property movements in the NZ market as managed by licensed real estate agents.

 

A full print version of the NZ Property Report – December 2011 is published below and is available for download (1.5MB) and distribution.

 

Summary of the market – December 2011

The property market saw a further tightening of supply in December, more especially in the 3 major cities where the market remains very firmly as a sellers market. In overall terms the number of new listings coming onto the market in December was considerably lower than expected given the surge in November. This lower level means that inventory levels of property on the market slipped again to remain below the long term average. In December with 47,557 properties on the market the current rate of sale would see these all sell in just over 36 weeks as against the long term average of 41 weeks. This national level has remained below the average for 6 months in a row and with strong sales in November and early December it is anticipated that this will continue into the new year.

The country overall is still balanced between a buyers and a sellers market with the provincial areas seeing less tightness in new listings and available inventory of property on the market.

 

Asking Price

The truncated mean asking price of $420,109 for all new listings in December eased slightly again from the peak in October of $434,161. On a seasonally adjusted basis the asking price actually rose 0.4%.

The long term trend as seen in the chart has been a steady increase in asking price over the past 3 years – the seasonal trend each year tends to see asking prices rise through from mid winter to October before falling back.

 

New Listings

The level of new listings coming onto the market in December fell on a seasonally adjusted basis by 2%. A total of 8,732 new listings came onto the market representing a 2% year-on-year fall.

For the calendar year of 2011 a total of 124,748 new listings came onto the market as compared to 138,789 for calendar year 2010 – a fall of 10%. By comparison the prior years stats were 2007: 177,529; 2008: 163,488; 2009: 135,416. So as compared to the peak of the market on 2007 listings are down 30%.

 

Inventory

The level of unsold houses on the market at the end of December slipped lower in somewhat of an unexpected trend. At the end of the month there were 47,557 houses, apartments and lifestyle properties on the market down from the 48,647 in November and down significantly from 53,077 a year ago. This current level of inventory represents 36.7 weeks of equivalent sales.

 

 

Regional Summary – Asking price expectations

The national truncated mean asking price expectation among sellers eased again in November to $420,109. This price trend has been seen for each of the past 4 years as rising asking prices begin to ease as the summer approaches.

Across the 19 regions the view is mixed with 10 regions showing an increase in asking prices as measured against the recent 3 month average. There were 4 regions showing significant rises n asking prices of over 5% – Central North Island, Nelson, Central Otago / Queenstown Lakes and West Coast.

Amongst the 9 regions showing a fall in asking price there were 6 regions where the falls were modest (between 1% and 5%) – Coromandel, Hawkes Bay, Wellington, Canterbury, Otago and Southland. The largest fall in asking price in the month was in the Wairarapa which saw asking price fall by 11% vs. December last year.

 

Regional Summary – Listings

New listings fell across most of the country in December with just 6 of the 19 regions seeing any increase on a year-on-year basis. The biggest falls was seen in the Wairarapa and the Coromandel which was down 26% with just 204 new listings, this follows a 29% year-on-year decline in November.

Contrasting these regions were the Central North Island reporting 35% increase, The other regions reporting increases all were below 20% increase indicating the low levels of new listings coming onto the market over recent months as compared to prior years.

The remainder of the country seems to reflect a balance with 3 regions reporting barely changed levels of new listings which would indicate a balance between buyers and sellers.

 

Regional Summary – Inventory

The inventory of unsold homes on the market eased slightly this month following a fall first seen last month. The expectations from October was to have seen some rise over the summer but with keen buying activity to the rise in new listings in November did not result in building inventory – quite the reverse.

Across the country there were a total of 9 regions where the advantage is to sellers. Of these the 7 regions of Auckland, Manawatu/Wanganui, Canterbury, West Coast, Central North Island and the Waikato remain very much in strong sellers markets.

There are however still 5 regions (Central Otago / Queenstown Lakes, Wairarapa, Southland, Taranaki and Gisborne) were the market is certainly favouring buyers with high levels of inventory set against long term average.

The market is now firmly in the peak summer season and with the more balanced market in terms of inventory of unsold properties on the market the options seem more open for both active buyers and sellers.

 

Lifestyle

Lifestyle property listings fell back in December with 845 listings in the month, this represented a 1.5% seasonally adjusted fall and was down 9% on the same month last year. The truncated mean asking price at $550,245 was up 2% from last year but down 8% down on the recent 3 month average.

Across the country strength in new listings was seen in Otago (33, up 120% Yr. on Yr.) and the West Coast (25, up 108% Yr. on Yr.). Whilst the Bay of Plenty, Hawkes Bay and Gisborne all saw year on year falls of over 30%.

 

Apartments

New listings for apartments fell to their lowest level in the past 4 years in December with just 346 apartments coming onto the market, this reflected a 35% from November and a 23% fall on last year. The truncated mean asking price of $396,501 was up 7% from prior month, but down 14% as compared to last year.

The Auckland market which dominates the apartment market saw a record low level of new apartment listings with just 196 new listings in December which was down 44% on prior month and down 27% down on last year. The asking price was $360,522 which was down 25% on last year but 2% up from November.

 

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, 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 8,732 new listings in the month of November, a total of 84 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.

 

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 December 2011 can be downloaded here (1.5MB 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 January 2012 will be published on this website on Wednesday 1st February 2012 at 10am.

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Auctions provide a bellwether for the the property market (Updated)

Posted on: December 22nd, 2011 | Filed in Buying / Selling a home, Featured

This article has been updated to reflect the further development of the market through to March 2012.

The state of the property market can be assessed by keeping a close eye on the number of properties being marketed for Auction. When you spot more and more of the For Sale street signs emblazened with “Auction” you can safely bet that the property market is heating up.

This view is certainly articulated in the article today titled “Auckland house auctions hit high“. Based on sales data supplied by the Real Estate Institute (REINZ) the number of properties sold in November across the country as Auctions was the highest ever at more than 25%. Looking specifically at the Auckland market Barfoot & Thompson November reported that around 40% of it’s current listings are being for sale by auction.

These reported statistics got me interested as we have in the past reported on the number of listings coming onto the market and specifically on the market across our comprehensive database. Back in August we reported that Auctions across the whole country had risen to a peak in June as representing 13% of all new listings, in Auckland that figure was even higher with over 20% of all new listings being for Auction properties for sale. These figures though are lower than the respective REINZ or Barfoot & Thompson figures.

Looking at the latest data for the month of November we saw 1,206 new listings of Auctions of properties come onto the market across NZ, this represented 9% of all new listings. In Auckland the number was 790 which represented over 17% – a new record, so the data is consistent.

In tracking the data over the past 4 years what is very interesting is that Auctions as a form of marketing rises as available inventory falls (as it does when the market picks up) and similarly falls as inventory rises. This is represented in the chart below, tracking new listings of Auctions per month as a % of all listings (blue bars) against the available stock on the market as measured as equivalent weeks sales as we track for the NZ Property Report.

In Auckland the same trend is evident, and more pronounced.

So it is clear that Auction marketing is a bellwether of the state of the market, which is not that surprising as vendors are more keen to pitch their property to a more active market when there is more demand from active buyers and see the open auction environment ensure that transparency works for them to maximise property demand lead pricing.

Updated

The first 3 months of 2012 has seen further significant growth in property sales matched to  further tightening in the property market as new listings have failed to keep pace with the growing demand – the latest NZ Property Report provides detailed analysis of this. A consequence of this is that auctions have further increased as a chosen route to selling a home.

As cited above record levels of new listings coming onto the market as auctions were witnessed pre-Christmas, those record levels have been exceeded in the past few months. March reached a new high with 13% of all property listings across the country being auctions and in Auckland a record 24% of all new listings being auctions.

Auckland though is not alone, the chart below shows the comparison across the 19 regions of the country between March 2011 and March 2012 or auction listings as representative of all new listings. Almost all regions saw a massive increase in representation of auctions within the new listings with the Central North Island and Gisborne sharing the Auckland record representation with nearly a quarter of all new listings as auctions.

 

Point of Note

The realestate.co.nz website has a very useful feature which allows you search by pricing type (Auction / Negotiation / Tender / POA / Offers / Display Price). As at this time there are 1,875 properties being marketed on the website as Auctions,  406 properties being marketed on the website as Tenders, and  36,906 properties being marketed with a price on the website 

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Property Pulse – November 2011

Posted on: December 20th, 2011 | Filed in Featured, Property Pulse - Regional Market Report

Each month we publish a factsheet for each region of the country as well as a national report to provide an insight to the key numbers that detail the health of the property market across the country.

These reports for the month of November cover all 16 provincial regions as well as reports covering the 3 main metropolitan regions of Auckland, Wellington and Christchurch. The Auckland report is divided up into each of the main metro areas (North Shore, Waitakere, Manukau as well as Auckland City).

Each factsheet provides the key numbers in table and chart form using the key statistics from the Real Estate Institute of NZ and Realestate.co.nz. This provides the number of property sales in the month, the median sales price for those property sales, the inventory of unsold properties on the market, as well as the number and the asking price expectation of new listings brought onto the market in the month.

Metropolitan Areas

Auckland City

North Shore

Waitakere

Manukau

Wellington

Chistchurch

Provincial Areas

Northland

Coromandel

Waikato

Bay of Plenty

Central North Island

Hawkes Bay

Gisborne

Taranaki

Manawatu / Wanganui

Wairarapa

Nelson

Marlborough

West Coast

Otago

Queenstown Lakes

Southland

National Property Pulse

The national NZ property pulse factsheet for November 2011 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales across the country totalled 6,008 in the month showed a strong rise on a seasonally adjusted basis in November and a significant 17% rise as compared to November 2010. The inventory of unsold houses on the market at 38 weeks of equivalent sales continues to sit below the long-term average of 41 weeks indicating that the market in overall terms is favouring sellers, although this bias is primarily being seen in the metro areas of Auckland and Christchurch.

The stratified mean sales price for property sales across the country at $372,225 is up 3% as compared to a year ago, and continues to show a steady rise over the past year and is now at a 3 year high. The asking price expectation of new listings slipped slightly from the peak seen in October; for the month of November the asking price was $425,956, which is 2% up as compared to a year ago.

The level of new listings coming onto the market in November at 13,369 showed a significant rise from October and is 3% up on a year ago.

 

 

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Northland Property Pulse factsheet – November 2011

Posted on: December 19th, 2011 | Filed in Northland Property Market Factsheet

The Northland region property pulse factsheet for November 2011 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales in Northland at 136 in the month increased on a seasonally adjusted basis in November and is up 26% as compared to a year ago. The inventory of unsold houses on the market at 136 weeks has risen after falling to a low of 128 weeks. It is now just back above the long-term average of 130 weeks of equivalent sales.

Median sales price for property sales in Northland at $305,000 is down 2% as compared to a year ago. The recent trend has been a continued decline over the prior 6 months although the past month has seen a slight pick-up. The asking price expectation of new listings fell in November to $365,293, an 8% fall from the asking price in November last year.

The level of new listings coming onto the market in November at 713 was up significantly from October and up 46% as compared to a year ago.

 

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Auckland region Property Pulse factsheet – November 2011

Posted on: December 19th, 2011 | Filed in Auckland Property Market Factsheet

The Auckland region property pulse factsheet for November 2011 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales across the Auckland region at 2,214 in the month rose on a seasonally adjusted basis in November and were up 27% on November 2010. The inventory of unsold houses slipped again to 26.9 weeks, having risen slightly last month to below the long-term average of 33 weeks of equivalent sales.

The stratified mean sales price at $510,000 rose 6% as compared to a year ago and fairly stable as it has climbed for the past 10 months. The asking price expectation of new listings also rose to $556,610 up 2% as compared to a year ago.

The level of new listings coming onto the market across the Auckland region in November at 4,459 rose 6% as compared to a year ago.

 

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Auckland – North Shore Property Pulse factsheet – November 2011

Posted on: December 19th, 2011 | Filed in Auckland Property Market Factsheet

The Auckland North Shore property pulse factsheet for November 2011 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales on the North Shore of Auckland at 431 in the month rose on a seasonally adjusted basis in November and were up 29% on November 2010. The inventory of unsold houses across the wider Auckland region at 27 weeks remains below the long-term average at 34 weeks of equivalent sales.

The median sales price for properties sold on the North Shore in November at $570,000 was up 4% from a year ago and continues to set new highs of the past 3 years. The asking price expectation of new listings across the wider Auckland region remains stable at $556,610 up just 2% as compared to a year ago.

The level of new listings coming onto the market across the wider Auckland region in November at 4,459 was up 6% as compared to a year ago.

 

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Auckland – Waitakere Property Pulse factsheet – November 2011

Posted on: December 19th, 2011 | Filed in Auckland Property Market Factsheet

The Auckland – Waitakere property pulse factsheet for November 2011 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales in the Waitakere are of Auckland at 318 in the month rose on a seasonally adjusted basis in November and were up a very significant 47% on November 2010. The inventory of unsold houses across the wider Auckland region at 27 weeks remains below the long-term average at 34 weeks of equivalent sales.

The median sales price for property in the Waitakere region of Auckland at $402,250 is up 6% as compared to a year ago whilst slipping slightly from the new 3-year levels. The asking price expectation of new listings across the wider Auckland region rose to $556,610 up 2% as compared to a year ago, and in-line with recent months.

The level of new listings coming onto the market across the wider Auckland region in November at 4,459 was up 6% as compared to a year ago.

 

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Auckland City Property Pulse factsheet – November 2011

Posted on: December 19th, 2011 | Filed in Auckland Property Market Factsheet

The Auckland City property pulse factsheet for November 2011 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales within the City of Auckland at 808 in the month rose strongly on a seasonally adjusted basis in November and was up 15% on November 2010. The inventory of unsold houses across the wider Auckland region at 27 weeks remains below the long-term average at 34 weeks of equivalent sales.

The median sales price for property in Auckland City at $565,000 was up 4% as compared to a year ago, and was up significantly on prior months. The asking price expectation of new listings across the wider Auckland region slipped slightly to $556,610 up 2% as compared to a year ago.

The level of new listings coming onto the market across the wider Auckland region in November at 4,459 was up 6% as compared to a year ago.

 

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Auckland – Manukau Property Pulse factsheet – November 2011

Posted on: December 19th, 2011 | Filed in Auckland Property Market Factsheet

The Auckland – Manukau property pulse factsheet for November 2011 is published using data from Realestate.co.nz and REINZ (Real Estate Institute of NZ).

Property sales in the Manukau region of Auckland at 423 in the month rose on a seasonally adjusted basis in November and were up a significant 43% on November 2010. The inventory of unsold houses across the wider Auckland region at 27 weeks remains below the long-term average at 34 weeks of equivalent sales.

The median sales at $484,000 was up 9% as compared to a year ago, recent prices have been fairly flat for the majority of the year until this significant upturn. The asking price expectation of new listings across the wider Auckland region rose to $556,610 up 2% as compared to a year ago, and in-line with the recent months.

The level of new listings coming onto the market across the wider Auckland region in November at 3,796 was down 3% as compared to a year ago.

 

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