Strong May Real Estate Market Across New Zealand

News Release 12 June 2012

Strong May Real Estate Market Across New Zealand

Data from the Real Estate Institute of New Zealand (REINZ) shows there were 7,175 unconditional sales in May, an increase of 26.4% compared to April, and an increase of 1,409 sales (+24.4%) compared with the same time last year. The increase of 26.4% compares with an average increase of 12.3% between April and May over the past 10 years, with May the third strongest month for real estate sales across the year.

The national median house price rose by $4,000 to $369,000, just $1,000 below the record high reached in March 2012. The national median house price is up 5.4% compared to May last year, with Auckland setting a new record median of $500,000, up 7.8% compared to May last year.

All regions recorded increases in sales volume compared to May last year, with Canterbury/Westland recording an increase of more than 56%, followed by Central Otago Lakes with 31.9% and Wellington with 28.3%. Auckland’s sales volume increase over May 2011 was 27.6%. Compared to April, all regions also recorded increases in sales volume with Taranaki the strongest region with an increase of 60.3%, followed by Hawkes Bay with 43.9% and Manawatu/Wanganui with 32.9%. Auckland recorded a 29.4% increase in sales in May compared to April.

For the month of May, Taranaki recorded the highest lift in prices for the month with an increase of 11.8%, followed by Manawatu/Wanganui with 4.6%, and Canterbury/Westland with 4.4%. Compared to May 2011, Taranaki also recorded the highest lift in prices with an increase of 9.8%, followed by Canterbury/Westland with 8.8% and Auckland with 7.8%. The REINZ Stratified House Price, which adjusts for some of the variations in mix that can impact on the median price, is 6.4% higher than May 2011 and is now also 0.3% higher than the previous peak of the market in November 2007.

“Sales volumes have been surprisingly strong in May, with all regions recording increases in sales over April and over May last year,” said REINZ Chief Executive Helen O’Sullivan. “May is typically stronger than April, ranking as the third busiest month in the year for real estate sales, but the increase is considerably stronger than normal seasonal trends would suggest. This is likely partly driven by good deals on interest rates during the month, and a desire by buyers to complete purchases before winter.”

“The strength of the real estate market continues to be focused on Auckland and Canterbury, with Auckland reaching a new milestone with a record median price of $500,000 and Canterbury/Westland again hitting its record median price of $335,000.”

The national median ‘days to sell’ eased by one day in May compared to April, from 37 to 38 days, although the number of days to sell has improved by seven days compared to May 2011. Over the past five years the median days to sell has averaged 41 days across New Zealand.

Auckland and Canterbury/Westland recorded the shortest days to sell at 33 days, followed by Otago with 35 days and Wellington with 42 days. Northland recorded the longest number of days to sell at 67 days, followed by Central Otago Lakes with 63 days and Taranaki with 58 days.

Nationally there were 1,071 dwellings sold by auction in May representing 14.9% of all sales, up from 584 sales in May 2011 representing 10.1% of all sales. Transactions in Auckland again dominated the auction market, representing 71.9% of the national total of auction sales. 27.6% of all dwelling sales in Auckland were by this method in May; this was up strongly from the 16.9% of sales by auction in May 2011. Sales by auction in Waikato/Bay Of Plenty accounted for 11.4% of the national total, Canterbury/Westland accounted for 8.2% of the national total, and all other regions combined accounted for the remaining 8.5% of auction sales in May 2012.

Further Data

Across New Zealand the total value of residential sales, including sections was $3.30 billion in May, compared to $2.57 billion in April, and $2.46 billion in May 2011. For the 12 months ended May 2012 the total value of residential sales was $29.56 billion.

The breakdown of the value of properties sold in May 2012 is:

$1 million plus / 303 / 4.2%
$600,000 to$999,999 / 1,039 / 14.5%
$400,000 to $599,999 / 1,817 / 25.3%
Under $400,000 / 4,016 / 56.0%
All Properties Sold / 7,175 100.0%

The REINZ Housing Price Index rose 1.7% in May compared with April. The REINZ Housing Price Index recorded increases in Auckland, Christchurch, Other North Island, Other South Island and Sections, with the only fall being recorded in Wellington. Compared to May 2011 the REINZ Housing Price Index rose 6.4%, and the National Index is 0.3% higher than the previous peak recorded in November 2007 (see table and chart below). The Auckland Index now 3.7% above the previous peak recorded in July 2007.

ENDS

REINZ_May_2012_Regional_Data.pdf
REINZ_Residential_Market_Statistics___May_2012.pdf

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.

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