Spring refreshes October real estate market

News Release 13 November 2014

Spring refreshes October real estate market

Summary

• 6,608 dwellings sold in October 2014, up 11.8% on September and down 2.4% on October 2013

• National median price of $430,000, up $10,000 on September and $10,000 below the record median set in March 2014

• Auckland median price reached a new record of $640,500, $3,500 above the previous high set in March 2014

• Days to sell improved by one day to 34 days compared to September, and eased three days compared to October 2013

• New record of 204 auctions in Canterbury/Westland, representing 36% of all Christchurch Sales

REINZ, the most up to date source of real estate data in New Zealand, announced today that there were 6,608 dwelling sales in the month of October, down 2.4% on October 2013 but up 11.8% compared to September. The national median price was $430,000 for the month of October, an increase of $22,000 or 5.4% compared to October 2013, and an increase of $10,000 or 2.4% from September 2014.

Real Estate Institute of New Zealand (REINZ) Chief Executive Helen O’Sullivan says, “There has been a noticeable increase in the level of activity in the real estate market in October, with sales up almost 12 percent compared to September, and down only 2.4 percent compared to October last year. Activity has increased across the country, with the largest monthly sales increases in the South Island. We have also seen an increase in listings across most of the country, although in many places the number of listings remains below that of previous years."

“It has been 12 months since the Reserve Bank introduced its LVR restrictions on borrowers. Over the past 12 months the volume of sales has trended down, and still continues to fall. Provincial regions in particular are still seeing volume trends decline, with median prices in a number of regions at best remaining flat over the past five years. Only Auckland, Taranaki, Canterbury and Central Otago Lakes have seen their median prices rise faster than inflation over the past five years, with three regions, Northland, Hawkes Bay and Manawatu/Wanganui seeing their median prices fall in absolute terms. The increasing divergence between the two largest metropolitian areas, Auckland and Christchurch, and the rest of the country remains in place."

Sales Volumes

REINZ data shows there were 6,608 unconditional residential sales in October, an 11.8% increase on sales recorded for September, and a 2.4% fall from October 2013. Typically, sales in October are higher than September with the seasonally adjusted number of sales up 3.9% on September, although down 5.0% compared to October 2013.

11 regions recorded an increase in sales volume compared to September with Otago recording the largest percentage increase of 28.8%, followed by Taranaki with 27.4% and Southland with 27.1%. Compared to October 2013 six regions recorded a increase in sales volume with Southland recording the largest increase of 10.3%, followed by Taranaki with an increase of 7.5% and Waikato/Bay of Plenty with an increase of 6.5%.

Prices

The national median house price rose $10,000 (+2.4%) to $430,000 compared to September. Compared to October 2013 the national median house price increased by $22,000 (+5.4%), with nine regions recording an increase in the median price. Auckland and Canterbury continue to account for the lion’s share of the movement, with 76% of the increase in the national median price compared to October last year occurring in Auckland, with Canterbury/Westland contributing 15% of the increase and Waikato/Bay of Plenty contributing just 3%. Together these three regions accounted for 94% of the increase in the median price between October 2013 and October 2014, with the remaining nine regions contributing 6% of the increase in the median price.

Auckland recorded the largest percentage increase in median price compared to October 2013, with a 10.1% increase, followed by Manawatu/Wanganui with an 10.0% increase and Canterbury/Westland with an 8.5% increase.

Compared to September 2014, Northland recorded the largest percentage increase in median price, up 13.9%, followed by Hawkes Bay with a 12.2% increase and Manawatu/Wanganui with a 7.5% increase.

The REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can impact on the median price, is 3.9% higher than October 2013, at 3988.9. The Auckland Index has risen 9.8% compared to October 2013, with the Christchurch Index up 9.1% and the Wellington Index up 2.5%.

Days To Sell

Dwellings took one day less to sell in October compared to September at 34 days. Compared to October 2013, the median number of days to sell was three days longer. Two regions saw an improvement in the number of days to sell between October 2013 and October 2014, with Taranaki recording an improvement of four days and Northland an improvement of two days. Auckland saw its number of days to sell ease by two days.

For the month of October, Canterbury/Westland recorded the shortest days to sell at 29 days, followed by Auckland at 31 days and Wellington at 32 days. Hawkes Bay recorded the longest number of days to sell at 52 days, followed by Central Otago Lakes and Northland at 51 days. Over the past 10 years the median days to sell for the month of October has averaged 34 days across New Zealand.

Auctions

Nationally there were 1,369 dwellings sold by auction in October representing 20.7% of all sales, and a reduction of 211 on the number of dwellings sold by auction in October 2013. For the 12 months to October 2014 the percentage of homes sold by auction was lower than the 12 months to October 2013 at 18.7%, with 13,601 homes sold by auction in the year ending October 2014 compared to 16,242 for the year ending October 2013.

Transactions in Auckland again dominated the auction market in October, representing 65.1% of the national total of auction sales. 36.3% of all dwelling sales in Auckland were by auction in October 2014, compared to 43.0% of all dwelling sales in Auckland in October 2013. Sales by auction in Waikato/Bay Of Plenty accounted for 11.8% of the national total, Canterbury/Westland accounted for 14.9% of the national total, and all other regions combined accounted for the remaining 8.2% of auction sales in October 2014.

Further Data

Across New Zealand the total value of residential sales, including sections was $3.578 billion in October, compared to $3.220 billion in September, and $3.447 billion in October 2013. For the 12 months ended October 2014 the total value of residential sales was $38.907 billion.

The breakdown of the value of properties sold in October 2014 compared to October 2013 is:

There were 311 fewer (­9.5%) sales under $400,000 in October 2014 compared to October 2013, compared to a drop of 164 sales (­2.4%) for all price brackets between the two periods.

REINZ Stratified Median Housing Price Index

The REINZ Housing Price Index rose 1.4% compared with September to sit at 3,988.9. Auckland rose 2.9%, Christchurch rose 2.7%, and Wellington rose 3.8%. For the 12 months to October the Auckland Index rose 9.8%, the Christchurch Index rose 9.1% and the Wellington Index rose 2.5%. The National Index increased 3.9% compared to October 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

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REINZ_Regional_Data__October_2014.pdf

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