Sales and Prices Rising in August Real Estate Market

News Release 13 August 2013

Sales and Prices Rising in August Real Estate Market

Summary

-6,548 houses sold in August 2013, up 8.5% on August 2012

-New median high price in Nelson/Marlborough; Canterbury/Westland back at its median high

-National Stratified House Price Index has reached a new record high; Auckland House Price Index also hit new high and is up 17.9% over August 2012

-1,416 houses sold by auction, representing 21.6% of all sales in August.

-Market continues to experience significant shortages of listings

REINZ, the most up to date source of real estate data in New Zealand, announced today that there were 6,548 dwelling sales in the month of August, up 8.5% on August last year but 3.4% lower than July. The national median price rose $5,000 compared to July to $390,000, and is now $10,000 below the record median set in March 2013.

Real Estate Institute of New Zealand (REINZ) Chief Executive Helen O’Sullivan says, “Agents from around the country are reporting strong activity from first home buyers moving to secure properties ahead of the Reserve Bank’s LVR changes. However, the reports suggest that this is occurring more in the regions, rather than in Auckland and Christchurch where we are seeing the greatest price pressure.“

“Overall the real estate market remains active with sales volumes about in line with what we would normally expect for this time of year. There are, however, signs of a slow down in the rate of sales volume growth. In August last year sales growth was running at 12% per annum and peaked at 33% per annum in April. Now, it has eased to 9% per annum and is trending down (see graph on final page). At the regional level only Northland, Auckland and Waikato/Bay of Plenty are reporting volume trends above the national average, with all other regions well below the average. Compared to the previous market volume peak during 2001 – 2004 volumes have not risen as fast in this cycle and are now trending down more quickly.”

"A key factor is the continuing lack of listings, which limits the stock of properties available for sale and reduces choice for buyers. Agents report across the country that potential sellers are taking a ’wait and see’ attitude both in terms of rising prices and what effect the Reserve Bank’s new lending policy will have on the market. This uncertainty in the short term is exacerbating the problem of supply, although there should be a traditional lift in properties for sale as Spring takes hold.”

Sales Volumes
REINZ data shows there were 6,548 unconditional residential sales in August, an 8.5% increase on August 2012, and a fall of 3.4% compared to July 2013. On a seasonally adjusted basis the volume of residential sales was down 0.6% compared to July, and up 11.7% compared to August 2012.

All bar one region recorded increases in sales volume compared to August last year, with Northland recording an increase of 15.3%, followed by Auckland with 12.6% and Canterbury/Westland Lakes with 12.1%. Nine regions recorded a decrease in sales volume in August compared to July, with Waikato/Bay of Plenty and Southland both recording a decrease of 9.7%, followed by Manawatu/Wanganui with a decrease of 5.5% and Nelson/Marlborough with a decrease of 5.1%.

Prices
The national median house price rose by $5,000 (+1.3%), from $385,000 in July, to $390,000 in August. Compared to August 2012 the national median house price increased by $20,000 (+5.46%), with 12 regions recording an increase in the median price. Three quarters (75.1%) of the increase in the national median price compared to August last year occurred in Auckland and 8.4% occurred in Canterbury/Westland. Together these two regions accounted 83.5% of the increase in the median price between August 2012 and August 2013.

Three other regions are at or near their highest median prices. Nelson/Marlborough recorded a new record median price of $366,500. Compared to August 2012 Hawkes Bay recorded the largest increase in median price, up 15.7%, followed by Manawatu/Wanganui with 11.6%. Auckland’s increase was 11.4% and Canterbury/Westland achieved 5.8%.

The REINZ Stratified Housing Price Index, which adjusts for some of the variations in mix that can impact on the median price, reached a new record high in August and is 9.5% higher than August 2012. The Auckland Index also reached a new record high in August and has risen 17.9% compared to August 2012. The Christchurch Index is up 6.1% and the Wellington Index is up 4.4%.

Days To Sell
Houses took one day less to sell in August compared to July, improving from 35 days in July to 34 days in August. Compared to August 2012, the number of days to sell also improved by one day. Five regions saw an improvement in the number of days to sell between August 2012 and August 2013, with Taranaki recording the largest improvement of nine days.

For the month of August, Canterbury/Westland recorded the shortest days to sell at 28 days, followed by Auckland at 29 days, and Wellington at 40 days. Northland recorded the longest number of days to sell at 72 days, followed by Southland with 71 days and Central Otago Lakes with 65 days. Over the past 10 years the median days to sell for the month of August has averaged 37 days across New Zealand.

Auctions
Nationally there were 1,416 dwellings sold by auction in August representing 21.6% of all sales and an increase of 57.8% on the number of dwellings sold by auction in August 2012. Auctions are increasingly favoured as a sales method in certain centres; for the 12 months to August 2013 the total number of sales by auction reached 15,527 or 19.5% of all sales, compared to 9,841 or 14.0% of all sales for the 12 months to August 2012.

Transactions in Auckland again dominated the auction market in August, representing 73.1% of the national total of auction sales. 38.6% of all dwelling sales in Auckland were by auction in August; this was up from the 34.2% of sales by auction in August 2012. Sales by auction in Waikato/Bay Of Plenty accounted for 8.4% of the national total, Canterbury/Westland accounted for 10.2% of the national total, and all other regions combined accounted for the remaining 6.0% of auction sales in August 2013.

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Further Data
Across New Zealand the total value of residential sales, including sections was $3.31 billion in August, compared to $3.31 billion in July, and $2.79 billion in August 2012. For the 12 months ended August 2013 the total value of residential sales was $38.57 billion.

The breakdown of the value of properties sold in August 2013 is:

$1 million plus 365 5.6%
$600,000 to $999,999 1,162 17.7%
$400,000 to $599,999 1,665 25.4%
Under $400,000 3,356 51.3%
All Properties Sold 6,548 100.0%

REINZ Stratified Median Housing Price Index
The REINZ Housing Price Index increased 2.1% compared with July to sit at 3,746.6. Auckland rose by 6.5% in August, Christchurch fell 1.0% and Wellington rose 1.4%. For the 12 months to August, the Auckland Index rose 17.9%, the Christchurch Index rose 6.1% and the Wellington Index increased 4.4%. The National Index increased 9.5% compared to August last year.

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* 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
Volume Trend Chart

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REINZ_Residential_Market_Statistics__August_2013.pdf

REINZ_August_2013__Regional_Data.pdf

ENDS

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