Prices Ease in April Real Estate Market But Volumes Remain Strong
News Release 13 May 2013
Prices Ease in April Real Estate Market But Volumes Remain Strong
Summary
7,104 houses sold in April 2013, an increase of 25% on April last year, and the best April turnover for six years.
Wellington and Other South Island Stratified House Price Indices hit new record highs in April, although the national median price eased 2.4% after hitting a new record high last month.
1,368 houses sold by auction, representing over 19% of all sales in April.
The volume of residential property sales in April reached the highest level in six years with sales compared to April 2012 up by just over 25 per cent. REINZ data (the most up to date market snapshot -see Editor's note at end of this release) showed that the national median price eased 2.4% compared to March after reaching a new record high last month, but remains 7.0% higher than April 2012.
The Chief Executive of the Real Estate Institute of New Zealand (REINZ), Helen O'Sullivan, says April was notable for the surge in prices and sales of mid-level homes in many parts of the country which was reflected in a new high for the REINZ Stratified Price Index and records for the index in Wellington and Other South Island districts. "Several regions appear to be benefiting from the tail-wind generated by the strength of house prices in Auckland and Christchurch."
Overall price levels in Auckland and Canterbury are continuing to have a major impact on the national picture, with Auckland recording the second largest increase in median price compared with April last year, and Canterbury the third largest increase in median price. Together, Auckland and Canterbury accounted for 92% of the increase in the national median price over the past 12 months.
"Auckland and Canterbury remain the two regions driving the national median price, a point recognised by the Reserve Bank in its recent monetary policy statement. We also note that the remaining 10 regions accounted for only 8% of the increase in the national median, with four of those regions recording falls."
Sales Volumes
REINZ data shows there were 7,104 unconditional residential sales in April, an increase of 1,428 sales (+25.2%) compared with the same time last year and a fall of 12.6% compared to March 2013. The increase over March on a seasonally adjusted basis was 0.8%, indicating that sales were slightly stronger than what would normally be expected for this time of the year.
All but one region recorded increases in sales volume compared to April last year, with Manawatu/Wanganui recording an increase of 36.5%, followed by Taranaki with 36.2% and Nelson/Marlborough with 34.2%. Four regions recorded an increase in sales volume in April compared to March, with Central Otago Lakes recording an increase of 11.3%, followed by Manawatu/Wanganui with 2.0% and Southland with an increase of 0.7%.
Prices
The national median house price fell by $9,500 (-2.4%), from $400,000 in March, to $390,500 in April, following a new record last month. Compared to April 2012 the national median house price increased by $25,500 (+7.0%), with four of the 12 regions recording a drop in the median price. Compared to April 2012 Taranaki recorded the largest increase in median price, up 15.9%, followed by Auckland with 13.3%, and Canterbury/Westland with 10.0%. Central Otago Lakes recorded the largest fall, down 10.1%, followed by Hawkes Bay, down 6.4% and Nelson/Marlborough, down 2.2%.
The REINZ Stratified Housing Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 9.8% higher than April 2012 and increased 0.8% compared to March. The Auckland Stratified Housing Price Index is up 14.1% compared to April 2012, while the Christchurch Stratified Housing Price Index is up 12.7%. The Wellington Stratified Housing Price Index hit a new record high in April, as did the Other South Island Stratified Housing Price Index
Days To Sell
Houses took three days longer to sell in April, compared to March, easing from 31 days in March to 34 days in April. Compared to April 2012, the number of days to sell improved by three days. Eight regions saw an improvement in the number of days to sell between April 2012 and April 2013, with Nelson/Marlborough recording the largest improvement of eight days.
For the month of April, Canterbury/Westland recorded the shortest days to sell at 27 days, followed by Auckland at 30 days, and Wellington and Nelson/Marlborough at 35 days. Central Otago Lakes recorded the longest number of days to sell at 57 days, followed by Northland with 56 days and Manawatu/Wanganui with 49 days. Over the past 10 years the median days to sell for the month of April has averaged 36 days across New Zealand.
Auctions
Nationally there were 1,368 dwellings sold by auction in April representing 19.3% of all sales - the third highest number of auction sales in a month and an 85.1% increase on the number of dwellings sold by auction in April 2012. Auctions are progressively becoming the favoured sales method in certain centres; for the 12 months to April 2013 the total number of sales by auction reached 13,995 or 18.0% of all sales, compared to 8,108 or 12.3% of all sales for the 12 months to April 2012.
Transactions in Auckland again dominated the auction market in March, representing 76.4% of the national total of auction sales. 37.2% of all dwelling sales in Auckland were by auction in April; this was up strongly from the 23.9% of sales by auction in April 2012. Sales by auction in Waikato/Bay Of Plenty accounted for 7.2% of the national total, Canterbury/Westland accounted for 9.0% of the national total, and all other regions combined accounted for the remaining 7.5% of auction sales in April 2013.
Further Data
Across New Zealand the total value of residential sales, including sections was $3.50 billion in April, compared to $4.11 billion in March, and $2.57 billion in April 2012. For the 12 months ended April 2013 the total value of residential sales was $36.63 billion.
The breakdown of the value of properties sold in April 2013 is:
$1 million plus 377 5.3%
$600,000 to $999,999 1,263 17.8%
$400,000 to $599,999 1,816 25.6%
Under $400,000 3,648 51.4%
All Properties Sold 7,104 100.0%
REINZ Stratified Median Housing Price Index
The REINZ Housing Price Index increased 0.8% in April compared with March to sit at 3,661.5 to reach a new record high, and the third month in 2013 in which the index has recorded an increase. Auckland eased 0.8% in April, although Wellington increased by 4.4% to reach a new record high and Other South Island rose by 1.4% to also reach a new record high. For the 12 months to April, the Auckland Index rose 14.1%, and the Christchurch Index rose 12.7% compared to the National Index increase of 9.8%. The Wellington Index also increased by 8.8% compared to April 2012.
* CAGR is Compound Annual Growth Rate
* The Christchurch data needs to be treated with some caution due to compositional changes in the suburb mix caused by the earthquakes in the city
For more real estate information and market trends data, visit
www.reinz.co.nz. For New Zealand's most comprehensive range of listings for residential, lifestyle, rural, commercial, investment and rental properties, visit www.realestate.co.nz - REINZ's official property directory website.
Editor's Note:
The monthly REINZ residential sales reports remain the most contemporary and up-to-date statistics on house prices and sales in New Zealand. They are based on actual sales reported by real estate agents. These sales are taken as of the date that a transaction becomes unconditional and includes sales as of 5:00pm on the last business day of the month. Other surveys of the residential property market are based on information from Territorial Authorities regarding settlement and the receipt of documents by the relevant Territorial Authority from a solicitor. As such, this information involves a lag of four to six weeks before the sale is recorded by the Territorial Authority.
The REINZ Monthly Housing Price Index is calculated using a technique known as stratification, which provides an averaging of sales prices for common groups of houses. This approach is considered a more robust analysis of actual house price trends and was developed in conjunction with the Reserve Bank.
The REINZ Monthly Housing Price Index is based on a value of 1000 in January 1992, the first month for which electronic information is available. Changes in the index represent movements in housing prices, where the mix of sales between the groups is held constant and are more likely to reflect genuine property price movements.
YOUR FIRST WORD IN REAL ESTATE May 2013
W
THE NZ ECONOMY
As predicted the housing Markets in Auckland and Christchurch have resulted in an intervention by the Reserve Bank, this has not been seen since 2007. First National Real Estate raised these concerns last month within the media across the country in their Press Release.
Median prices only show where the market is performing- First National Press Release
'Reported record median price rises do not always indicate what is happening in the market. Median prices only show where the market is performing. If the median price is high, then this shows activity at the upper level, if the median is lower it shows activity in the lower range of the market. Some people are influenced by the hype of the Auckland and Christchurch market and the median price can also put people off purchasing, whereas this not always a realistic indicator. In summary, the regulatory decisions relating to property increase as well as a potential early increase in the OCR means a cautious approach should be taken, if using either median house prices or Auckland and Christchurch as the indicators'.
Reserve Bank Intervene- First time since 2007 (National Business Review) “The Reserve Bank have intervened in the financial markets in an attempt to stabilise the currency which was "significantly overvalued, while warning the strength in the property market was threatening the country's financial system,” were the comments made after Mr Wheelers briefing. “The housing market has become a growing headache for the central bank, as Auckland sale prices hit new record highs in a rapidly heating market, while at the same time a strong currency has limited the bank's ability to stoke lending growth with lower rates.”
OFFICIAL CASH RATE & INTEREST RATE
No prediction for an increased OCR; Tony Alexander BNZ Economist reports that household debt grew only 0.4% in March and that has been the rate of growth for almost all of the months since July last year. We also get a benign inflation outlook which suggests no change upward in the official cash rate until well into next year - or 2015. The Reserve back adjustment will have more effect for the exporting sector than on the OCR.
PROPERTY MARKET REPORT- NOTHING NEW
The property market continues to show signs of confidence and heightened activity as compared to the past few years. The confidence amongst sellers bringing their properties onto the market has pushed up the (seasonally adjusted) truncated mean asking price to a new high of $447,275 - the highest level since the collection of data began in 2007.
This rise in asking price was noticeable in around half of New Zealand, with Auckland reaching a new record high of $612,167, and Central Lakes Otago reaching a new high of $679,987. A record low of $353,474 was seen in Marlborough (down 9% on March figures). (Realestate.co.nz)
IF I WERE A BORROWER WHAT WOULD I DO?
TONY ALEXANDER: BNZ
“Nothing new. Float, look for fix half 3 -5 years when lenders offer heavily discounted rates, and place some of the floating portion out to 18 months.”
NEW LISTING REPORT -APRIL
The number of new listings fell to 10,023, down 21.5% on March and down 1.5% year on year. In the main centres, both Auckland and Canterbury experienced an increase in listings when compared to April last year of 9.3% and 0.8% respectively and Wellingtons figure fell by just 1.9%.
The next 3 months are traditionally a quieter time for the market, with lower listings ahead of the spring pick up in August. If property sales continue strongly it is likely that asking prices will continue to creep up as demand for property continues to remain high.
[Real Estate.co.nz]
PROPERTY INVESTORS
The recent survey undertaken by the BNZ reveals that there is no evidence of upward pressure on rents, while house prices are increasing; rental upward pressure is not that great. This latter dimension reflects the inability of landlords to raise rents in our medium income in a country where people can afford only so much. In addition with investors purchasing more properties largely for the capital gains they expect to accrue, rent is not always the primary consideration.
WHY USE A LICENCED REAL ESTATE AGENT AT FIRST NATIONAL ?
When selling your largest, most valuable asset, a seller should be seeking to gain the most value and best sale price. In this current market it is very difficult to determine the value of your property, as QV and GV do not always provide the most recent sales within your street or neighbourhood.
Our agents have in depth, up to date knowledge on what is happening in the market. They can price your home competitively to gain maximum price. Our agents can provide advice on improvements you can make to better present your home to the market.
Selling a home is a very stressful period in our lives, however there is legislation and protection you receive through working with a Licenced Real Estate agent, who complies with the Real Estate Agency Act 2008. This provides you remedies in the event of grievances as a buyer or seller.
Finally, your agent is an experienced negotiator who will always work in your best interest.
View all our listings on
www.guardianfirstnational.co.nz
