Volumes and Prices Strengthen in March

News Release 13 April 2011

Volumes and Prices Strengthen in March

The national housing market recorded a strong seasonal lift in volumes during the month of March with an accompanying modest rise in the level of prices according to REINZ figures, the most up-to-date series of data on the New Zealand real estate market. Across New Zealand 5,848 unconditional sales were reported, a 29.9% increase over February 2011, and an increase of 32.2% when Canterbury/Westland figures are excluded from both totals. Volumes were 1.5% higher in March 2011 compared to March 2010 when Canterbury/Westland figures are excluded from both totals. The national median price increased by $15,000 to $365,000 from February 2011, and by $4,500 compared to March 2010.

On a seasonally adjusted basis and excluding Canterbury/Westland from both totals, volumes rose 5.4% in March 2011 compared to February 2011, and rose 1.0% compared to March 2010. Auckland recorded 53.2% more sales in March than February, and 11.4% more than March 2010. On a seasonally adjusted basis Auckland’s volumes rose 10.5% compared with February and 10.8% compared to March last year.

“The March results show real growth in volumes in the Auckland market,” said REINZ Chief Executive Helen O’Sullivan, “Volume growth across the rest of the country, while impressive compared with February, is more in line with seasonal trends. We are also seeing that while volumes have strengthened, prices are only showing modest changes across the country. Buyers are increasingly seeing price stability, which is giving them confidence to enter the market.”

O’Sullivan said, “The strong growth in Auckland has been driven by a number of factors including a persistent shortage of housing stock, continued weak building consents, resulting rental pressure and low interest rates. There were also some pockets of strength outside of Auckland, with Tauranga, Mt Maunganui/Papamoa, Hutt Valley and Timaru all showing both median house price and volume growth.”

Underscoring the volume growth, the national median ‘days to sell’ (measuring the number of days from listing date to unconditional date) fell from 58 days in February 2011 to 41 days in March 2011, compared with 35 days in March 2010. Auckland recorded the shortest days to sell at 35 days, with Southland next shortest at 36 days. Across the country all regions other than Nelson/Marlborough recorded a decrease in days to sell. Northland remained the region with the longest number of days to sell at 94 days; however, this is a 17 day improvement over the February 2011 measure of 111 days. Days to sell in Canterbury/Westland also recorded an improvement between February 2011 and March 2011, falling from 57 to 50 days.

As expected the volumes in Christchurch City have fallen dramatically in March 2011 compared to February 2011 and March 2010. What is remarkable is that despite a number of conditions becoming essential to transactions, including insurance, there were 193 unconditional sales in Christchurch in March. This compares with 244 in February 2011 and 595 in March 2010. Analysis of the detail - unsurprisingly - shows that there is activity in certain areas whilst other areas show little or no movement. The median house price in Christchurch has barely changed with the median price of $320,000 for March 2011 being only $5,000 below the February median and equal to the March 2010 median house price.

Further Data

Across New Zealand the total value of residential sales, including sections rose to $2.62 billion in March 2011, compared to $1.92 billion in February 2011.

The breakdown of the value of properties sold in March 2011 is:

$1 million plus 250 4.3%
$600,000 to $999,999 785 13.4%
$400,000 to $599,999 1,530 26.2%
Under $400,000 3,283 56.1%
All Properties Sold 5,848 100.0%

The REINZ Housing Price Index rose 0.5% in March compared with February 2011, with the stratified median house price at just above $361,500. The REINZ Housing Price Index recorded increases in Auckland, Christchurch and Other North Island, but also recorded falls in Wellington and Other South Island.

Compared to March 2010, the Housing Price Index fell 1.8%, and the Index is now 5.1% below the peak recorded in November 2007. The Section Price Index rose 0.6% in March 2011 but remains 16.4% below its peak recorded in July 2008. (see table and chart below).

REINZ Housing Price Index Chart

REINZ Stratified Median Housing Price Index Statistics

Index Level 1 Month 3 Months 12 Months 5 Years
(CAGR)* From Peak

New Zealand 3209.7 0.5% 0.3% -1.8% 2.3% -5.1%
Auckland 3478.2 3.3% 1.6% 1.8% 2.8% -4.3%
Wellington 3331.6 -2.4% 1.1% -3.2% 3.1% -4.8%
Christchurch 2993.8 5.6% 0.7% 3.1% 2.9% -3.2%
Other North Is 3076.5 0.6% -0.3% -3.3% 1.1% -9.7%
Other South Is 3232.7 -1.3% 1.6% -2.4% 2.7% -7.9%
Sections 4523.4 0.6% 0.8% -1.0% -0.3% -16.4%

* CAGR is Compound Annual Growth Rate

ends

© Scoop Media