Strong Start To Spring In September Real Estate Market

News Release 14 October 2013

Strong Start To Spring In September Real Estate Market

Summary

• 6,720 houses sold in September 2013, up 19% on September 2012
• New median high prices in Auckland and Canterbury/Westland; National median price back at its March 2013 high of $400,000
• National Stratified House Price Index reaches new high
• 1,606 houses sold by auction, representing 24% of all sales in September
• One in five sales were by auction in the 12 months to September 2013

REINZ, the most up to date source of real estate data in New Zealand, announced today that there were 6,720 dwelling sales in the month of September, up 18.9% on September last year and up 2.6% compared to August. The national median price increased $10,000 compared to August to $400,000, and is now equal to the record median set in March 2013.

Real Estate Institute of New Zealand (REINZ) Chief Executive Helen O’Sullivan says, “Real estate sales volumes have been strong in the lead up to the introduction of LVR restrictions by the Reserve Bank, with sales up over 19% compared to September last year.“

“Sales volumes are ahead of what we would normally expect for this time of the year, with strong growth in sales coming through in several regional centres. Northland is experiencing a very strong uplift in its sales volume trend, with Taranaki and Nelson/Marlborough also showing positive trends in sales volume and price, although these three regions remain some way behind Auckland and Canterbury/Westland in terms of pure price movements. Waikato/Bay of Plenty is also seeing a noticeable uplift in sales volumes.”

“While these regions are seeing the number of sales lifting the same cannot be said for prices outside of Auckland and Canterbury/Westland. Auckland’s median price has increased by $120,000 (+26.7%) since the end of the previous price cycle in November 2007, and Canterbury/Westland’s median price has increased $61,000 (19.4%). However, for the rest of New Zealand combined, the median price has actually fallen $3,000 (-1.1%) over the same time period (see graph on final page).

Sales Volumes
REINZ data shows there were 6,720 unconditional residential sales in September, an 18.9% increase on September 2012, and an increase of 2.6% compared to August 2013. On a seasonally adjusted basis the volume of residential sales was up 4.6% compared to August, and up 14.1% compared to September 2012.

All but two regions recorded increases in sales volume compared to September last year, with Taranaki recording an increase of 50.8%, followed by Northland with 28.0% and Southland with 23.9%. Seven regions recorded an increase in sales volume in September compared to August, with Taranaki recording an increase of 15.3%, followed by Nelson/Marlborough with an increase of 10.8% and Southland with an increase of 10.7%.

Prices
The national median house price rose by $10,000 (+2.6%), from $390,000 in August, to $400,000 in September to equal the record median high reached in March 2013. Compared to September 2012 the national median house price increased by $29,000 (+7.8%), with eight regions recording an increase in the median price. Three quarters (75.0%) of the increase in the national median price compared to September last year occurred in Auckland and almost 20% occurred in Canterbury/Westland. Together these two regions accounted 95% of the increase in the median price between September 2012 and September 2013.

Auckland and Canterbury/Westland recorded new median highs in September, with Auckland reaching $570,000 and Canterbury/Westland $375,000. Compared to September 2012 Canterbury/Westland recorded the largest increase in median price, up 13.6%, followed by Auckland with 10.7% and Taranaki with 6.3%.

The REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can impact on the median price, reached a new high in September and is 9.8% higher than September 2012. The Auckland Index has risen 17.5% compared to September 2012, with the Christchurch Index up 11.4% and the Wellington Index up 0.6%.

Days To Sell
Houses took three days less to sell in September compared to August, improving from 34 days in August to 31 days in September; this is the shortest number of days to sell in September since 2006. Compared to September 2012, the number of days to sell improved by two days. Eight regions saw an improvement in the number of days to sell between September 2012 and September 2013, with Southland recording the largest improvement of 23 days.

For the month of September, Canterbury/Westland recorded the shortest days to sell at 26 days, followed by Otago at 27 days, and Auckland at 29 days. Central Otago Lakes recorded the longest number of days to sell at 69 days, followed by Northland with 66 days and Waikato/Bay of Plenty with 49 days. Over the past 10 years the median days to sell for the month of September has averaged 35 days across New Zealand.

Auctions
Nationally there were 1,606 dwellings sold by auction in August representing 23.9% of all sales and an increase of 55.5% on the number of dwellings sold by auction in September 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 16,005 or 19.9% of all sales, compared to 10,295 or 14.6% of all sales for the 12 months to September 2012.

Transactions in Auckland again dominated the auction market in August, representing 75.3% of the national total of auction sales. 43.8% of all dwelling sales in Auckland were by auction in September; up from the 39.4% of sales by auction in September 2012. Sales by auction in Waikato/Bay Of Plenty accounted for 8.1% of the national total, Canterbury/Westland accounted for 9.8% of the national total, and all other regions combined accounted for the remaining 4.7% of auction sales in September 2013.

Further Data
Across New Zealand the total value of residential sales, including sections was $3.41 billion in September, compared to $3.31 billion in August, and $2.62 billion in September 2012. For the 12 months ended September 2013 the total value of residential sales was $39.36 billion.

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

$1 million plus 382 5.7%
$600,000 to $999,999 1,245 18.5%
$400,000 to $599,999 1,743 25.9%
Under $400,000 3,350 49.9%
All Properties Sold 6,720 100.0%

REINZ Stratified Median Housing Price Index
The REINZ Housing Price Index increased 0.8% compared with August to sit at 3,778.1 to reach a new record high. Auckland fell by 1.0% in September, Christchurch rose 1.8% and Wellington fell 1.9%. For the 12 months to September, the Auckland Index rose 17.5%, the Christchurch Index rose 11.4% and the Wellington Index increased 0.6%. The National Index increased 9.8% compared to September last year.

* 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

Price Split Chart

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