April 12th, 2013
The Real Estate Institute of NZ (REINZ) just yesterday released sales statistics covering March 2013.
Although the Nelson/Marlborough region saw a median of $344, 000…..
….. Nelson City itselfs medium was $350, 000.
The heading probably did nothing to not attract attention from the housing bubble crowd.
Its apparent that Nelson definitely experienced a surge in listings, and that in turn spurned an interest in visiting homes, and ultimately transacting same. Local conveyancers report this week that March was busy, and 2 mentioned it still seemed to be the same for the start of April.
The above chart certainly tells the story I am alluding to, in terms of percentage changes from prior. The situation with Coromandel is a one off and does not reflect any trends I believe.
This was reflected in… local property asking prices.
…as the above chart illustrates. Although this months REINZ commentary mentions that;
Auckland and Christchurch drive an 8.1% or $30,000 increase in the national median house price compared to March 2012, to a new record of $400,000
…..it would seem if the above chart is taken into consideration that we on the shores of Tasman Bay are stepping up to the plate too.
And as would be the case, there is some interaction between all these charts, one thats plain to see when you look at the above one discussing Days on Market. (actually mentioned above using the Weeks on Market term)
Unfortunately for Kiwis, as the Institutes Chief Executive, Helen O’Sullivan, quoted above and continued…
The says price levels in Auckland and Canterbury are having a disproportionate impact on the national picture and potentially skewing perceptions of the overall market. “Analysis by REINZ shows that 90% of the increase in the median price between March 2012 and March 2013 of $30,000 came from just two regions, Auckland and Canterbury/Westland. Together these two regions represent 52% of national house sales, indicating that the remaining 10% of the increase came from the remaining 10 regions which cover 84% of New Zealand geographically.”
“There’s a real danger that the Auckland housing market is mistaken for the New Zealand housing market, and that regulatory decisions will be made on the assumption that conditions in Auckland and Canterbury are replicated across the rest of the country.”
….the coming interest rate increases will be shared equally amongst all Kiwis.
As I’ve harped on before, and recent nights even the 7pm Current Affairs programs have too, regurgitating the proverbial “housing boom” or “housing price bubble” rhetoric, there is only one thing that is creating all this….SUPPLY & DEMAND. Although on that DEMAND point there is a couple of contributing factors that we have here in NZ, specifically in Auckland, specifics about the ability to actual purchase a local property, that aren’t seen in tons of other countries, including OECD members.
One point is overseas buyers pushing up Auckland prices, as mentioned just this week in BNZ Economist Tony Alexanders weekly commentary.
Citing info in this weeks “The Listings Shortage Worsens” commentary, the following anecdote was quoted from a subscriber…
“I wanted to pass back some anecdotal evidence of Chinese buying of residential property in Auckland. Yesterday I called in to view an auction in Milford (next suburb up from Takapuna – in case you don’t know the area). The location has good school zoning but is quite cold in winter. It would be similar to less attractive parts of Karori in Wellington.
The property was a 40+ year old bungalow which the current owners had owned for the last 19 years and were downsizing. It badly needed modernising and re-decorating. It has a QV of NZD620k and we thought it would sell for around $780k max.
Some 120 interested parties attended the auction including at least 5 groups of prospective Chinese buyers – say 50 such people in total. The auction started with a hiss and a roar and quickly blew through the owner’s reserve. It ended up with three Chinese groups bidding against each other with a final buy price of $1023k – a staggering 65% over the QV. This is not an isolated case. I spoke with two of the buyers neither of whom were NZ residents. Both said they will be back to buy ‘more’ houses – how many I don’t know.”
Interesting indeed if this is happening in Auckland.
If you haven’t visited his site and you are interested in NZ property, then its about time you did. One of the features is Tonys summations of views from tons of real estate related folk around NZ, the BNZ REINZ Survey, a way for the reader to get a pulse about whats happening at the coal face as it were. Here’s what he says;
Each month we ask over 10,000 licensed real estate agents their views on whether things are increasing or decreasing with regard to such things as numbers through Open Homes, requests for appraisals, presence of investors and first home buyers, plus factors motivating buyers and vendors. The survey started in April 2011.
Quotable Value NZ released figures showing Nelson City experienced a 2.8% growth factor for an average value of $389, 939….just behind neighbouring Tasman District which pipped in at 2.9% increase for an average value of $400,874. They also commented;
SIGNS THAT MAIN CENTRES MAY BE SLOWING
Although increases are still occurring, areas like Auckland, Hamilton and Christchurch are starting to see the rate of growth slow recently. It is too early to tell however, whether this is going to be a more widespread slowing of values.
In conclusion, the REINZ Chief Executive commented on the Nelson market;
“…the Nelson market continues to suffer from a shortage of listings with buyer demand outstripping the supply of listings. Despite that first home buyers are active in the market along with some investors looking to buy while interest rates remain low.”
And that was the month that was, March 2013.