The latest sales figures released by The Real Estate Institute show a very subdued level of activity – just 4,469 properties were sold across the country in October – traditionally a strong month for sales as seasonal spring activity initiated in August and September culminates in strong sales in October and November before the onset of the Christmas period.
The year to date sales total 47,547 some 40% down on the same period to October 2007 – taken on a rolling 12 month basis as shown in the graph below (volume of sales – red line, value of sales – blue line) the 12 months to October totaled 60,981, which is the lowest level of sales recorded stretching back to 1993.
With this traditional spring resurgence in sales activity usually comes a fresh clutch of listings onto the market and a pick up in buyer interest. The commentary reported last week showed the impact on buyer confidence of the credit crisis which began in September and at this time shows little sign of abating, although from this updated graph of tracked visitors to real estate websites the relief of the elections has generated a tentative upturn in viewings.
Looking at the state of the market in terms of inventory of properties being marketed by real estate agents the website of realestate.co.nz currently features over 62,000 listings of properties for sale (excluding sections) from amongst the 113,000 listings in total – a record level for the website.
The extent of the inventory of listings is clearly highlighted in the graph below which shows the quantity of new listings (red line) being added to the site over the past 2 years as well as the sales by month and the consequential inventory build.
The inventory is represented in terms of weeks of inventory based on the rate of sale of property in the month. Clearly evident from the graph is the inventory levels rising from mid 2007 at around 25 weeks through to a peak of 55 weeks in April of 2008. Subsequently with a decline in new listings that inventory has come back to a level of 48 weeks especially as sales have been so flat. The latest statistics for October show a new clutch of listings coming onto the market; over 14,000 in the month which has seen a slight increase in inventory – less than expected possibly as some of these listings may be re-presentation of property previously marketed earlier in the year.
Thanks for the update Alistair.
Is it possible to get data for houses as desirable homes in good condition,
separated from investment properties and properties requiring work?
By the way there is an annoying bug in the text editor of these comments that is preventing,
word wrap of the visible text.
Andrew
Dealing to the 2nd issue – apparently it is an issue with IE 6.0 – we are adding a patch to fix.
Now the more interesting question – wouldn’t it be great!?
Unfortunately we cannot do this as the fact is we are a publisher and as such only present listings on behalf of real estate agents. We rely on them to create listings and whilst I can see the enormous appeal of being able to search for these attributes it requires them to identify that this would be the category for such property.
All I can suggest is to do a keyword search for the terms you seek to see if any agents define their listings in such a way.
REINZ should start providing house price index numbers, which are relative weighted averages, rather than highlighting median house prices and volume statistics. Raw statistics do not indicate much but a properly constructed index number can. We are all used to CPI…
Sam
An excellent suggestion – certainly that is the norm in other countries – the US Case Shiller index and in the UK the Halifax house price index.
Not sure though how aware REINZ is to the bubbling sentiment of disquiet I am hearing as to creditability and relevancy of the median price stats.
”Not sure though how aware REINZ is to the bubbling sentiment of disquiet I am hearing as to creditability and relevancy of the median price stats”.
I suspect they will attempt to remain oblivious to the question as it suits them to so do so (witness the comments from the new REINZ president on the October median figures – did they actually get someone new in or did they just clone Murray Cleland?). However it could lead to some interesting exchanges between the REINZ and QV; thus it is not at all inconceivable that by Feb/March of next year QV is reporting double digit falls in national prices whereas REINZ is reporting the same old, same old -3, -4%. The reason would be of course the deficiency of the REINZ measure. As already pointed out on interest.co.nz there has been a significant change in the mix of houses still selling compared to last year; basically the sub 400K market has fallen away, whereas the plus $400K market has held up better. The reasons for this are of course obvious – the credit crunch acts disproportionately on first time buyers/landlords/those with low existing equity (ie those who buy at the cheaper end), whereas those at the more expensive end are much less effected. Result – as relatively more houses sell in the higher ranges both the mean and median are held up considerably higher than they would be. In contrast the QV measure uses as its staring point a fixed value in time (the valuation given on the house) against which subsequent changes can be measured.
The situation may well turn out to be analogous to the US; there the US equivalent of the REINZ uses a median – according to them the US market is down around 8% (last time I looked). In contrast the Case Schiller (which uses comparative values) shows falls of 17%. Its pretty clear which one of these indexes is closest to the mark.
Ultimately this could all back-fire on the REINZ as their measure is seen to be less and less relevant – it would only take a relatively simple campaign in the media to highlight the fact that the QV index is superior. I can just see John Campbell getting interested………..
And more comment here:
http://www.interest.co.nz/ratesblog/index.php/2008/11/14/video-house-sales-volumes-4469-down-a-third-from-2007/#comment-11231
Interesting comments… Please don’t shot me, I am a real estate sales person in Ellerslie/Remuera (Auckland).
I think The industry as a whole is not so interested in offering stats that are as detailed as indexes as per other countries. It seems problematic to categorise properties. It must be noted that ultimate control should rest in the hands of vendors as to how their property is categorised.
Keyword search is a good suggestion.
Suggestion… Ask an agent for information to assist in making a decision on value. Remember that ultimately market value is what a willing buyer and sellers are prepared to accept for any given property. Buying property is difficult and I suggestion seeking help from the experts.
This is not a science but more a sport, full of emotion.
REINZ monthly sales so you can see each year:
http://img.photobucket.com/albums/v207/neuralnetwriter/financial/HousePrices/NZ/REINZ_Monthly_Sales_1992to2008_0811.gif
[...] most comprehensive item I have seen on the housing market lately is this excellent post by Alistair Helm of realestate.co.nz which included this graph that clearly shows volume of sales [...]