Highest May house sales for six years

News Release 12 June 2013

Highest May house sales for six years

Summary

• 7,714 houses sold in May 2013, an increase of 7.5% on May last year, and the best May result for six years.

• Median prices reach new high in Auckland, Nelson/Marlborough and Canterbury/ Westland

• New National Stratified Index record, with highs also for Auckland, Christchurch and Other South Island

• 1,576 houses sold by auction, representing over 20% of all sales in May.

• Market is experiencing a significant shortage of listings

Residential property sales continued to advance in May with REINZ data (the most up to date market snapshot –see Editor’s note at end of this release) showing the number of sales was the highest for the month of May since 2007. Compared to May last year the number of transactions increased by 7.5%. The national median price increased $1,500 compared to April and remains just $8,000 below the record median set in March 2013.

The Chief Executive of the Real Estate Institute of New Zealand (REINZ), Helen O’Sullivan, says price levels in Auckland and Canterbury are continuing to have a major impact on the national picture. Auckland recorded the largest increase in median price compared with May last year, and Canterbury the third largest increase in median price. Together both regions accounted for 82% of the $23,000 increase in the national median between May 2013 and May 2012. Price gains in other centres have been modest.

"There are too few houses coming to market in the Auckland region creating an imbalance between supply and demand and driving up house prices at both the regional and national level. The number of residential properties available for sale is falling back to levels last seen when house prices fell in 2008 - 2009. As we know the low level of new builds is well below trend making little impact on the available stock of residential properties for sale. “

Since sales volumes started to rise from their Global Financial Crisis lows at the start of 2011, the annual increase in sales numbers in Auckland has been just over 20%, however, the number of listings in Auckland has increased at a little over 3% per annum since the number of listings stopped falling in July 2011. Adding in new builds via the number of building consents issued only increased the supply by 4% per annum since the low of July 2011.

“We would normally expect the number of listings to increase more rapidly coming out of a downturn, but as yet, this does not appear to be happening. While buyers are actively seeking properties, it appears that existing owners are not being motivated to sell by the increase in prices that have occurred across the Auckland region.”

“REINZ is seeing evidence of listings shortages right across the country, with only a handful of regions reporting sufficient supply of properties for sale. With the winter months now upon us there is unlikely to be any easing of the listings shortage until spring.”

Sales Volumes

REINZ data shows there were 7,714 unconditional residential sales in May, an increase of 539 sales (+7.5%) compared with the same time last year and an increase of 8.6% compared to April 2013.

Nine regions recorded increases in sales volume compared to May last year, with Northland recording an increase of 23.3%, followed by Waikato / Bay Of Plenty with 15.1% and Otago with 12.2%. 11 regions recorded an increase in sales volume in May compared to April, with Hawkes Bay recording an increase of 23.2%, followed by Southland with 17.5% and Waikato / Bay Of Plenty with an increase of 11.9%.

Prices

The national median house price increased by $1,500 (+0.4%), from $390,500 in April, to $392,000 in May. Compared to May 2012 the national median house price increased by $23,000 (+6.2%), with 11 of the 12 regions recording an increase in the median price. 82% of the increase in the national median price compared to May last year occurred in Auckland and Canterbury/Westland.

Three regions recorded new record medians in May with Auckland posting a new record of $565,000, Canterbury/Westland a new record of $360,000 and Nelson/Marlborough posting a new record of $353,625. Compared to May 2012 Auckland recorded the largest increase in median price, up 13.0%, followed by Central Otago Lakes with 11.5%, and Canterbury/Westland with 7.5%. Manawatu/Wanganui recorded the only fall, down 0.2%.

The REINZ Stratified Housing Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 8.7% higher than May 2012 and increased 0.7% compared to April. The National, Auckland, Christchurch and Other South Island

Stratified Housing Price Indices all hit new record highs in May, with the Auckland Index up 14.8% compared to May 2012, the Christchurch Index is up 13.1% and the Other South Island Index up 5.4%.

Days To Sell

Houses took one day longer to sell in May compared to April, easing from 34 days in April to 35 days in May. Compared to May 2012, the number of days to sell improved by three days. Seven regions saw an improvement in the number of days to sell between May 2012 and May 2013, with Southland and Manawatu/Wanganui recording the largest improvement of seven days.

For the month of May, Canterbury/Westland recorded the shortest days to sell at 28 days, followed by Auckland at 31 days, and Wellington at 37 days. Central Otago Lakes recorded the longest number of days to sell at 81 days, followed by Northland with 68 days and Taranaki with 55 days. Over the past 10 years the median days to sell for the month of April has averaged 38 days across New Zealand.

Auctions

Nationally there were 1,567 dwellings sold by auction in May representing 20.3% of all sales – the second highest number of auction sales in a month and a 68% on the number of dwellings sold by auction in May 2012. Auctions are increasingly favoured as a sales method in certain centres; for the 12 months to April 2013 the total number of sales by auction reached 14,450 or 18.5% of all sales, compared to 8,595 or 12.8% of all sales for the 12 months to May 2012.

Transactions in Auckland again dominated the auction market in March, representing 74.5% of the national total of auction sales. 38.1% of all dwelling sales in Auckland were by auction in May; this was up strongly from the 27.6% of sales by auction in May 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 7.0% of auction sales in May 2013.

Further Data

Across New Zealand the total value of residential sales, including sections was $3.78 billion in May, compared to $3.50 billion in April, and $3.30 billion in May 2012. For the 12 months ended May 2013 the total value of residential sales was $37.10 billion.

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

$1 million plus 407 5.3%

$600,000 to $999,999 1,406 18.2%

$400,000 to $599,999 1,982 25.7%

Under $400,000 3,919 50.8%

All Properties Sold 7,714 100.0%

REINZ Stratified Median Housing Price Index

The REINZ Housing Price Index increased 0.7% in May compared with April to sit at 3,686.9 to reach a new record high, and the fourth in 2013. Auckland increase by 2.0% in May to also reach a new record high, as did Christchurch with an increase of 1.9% over April and Other South Island with an increase of 1.6% over April. For the 12 months to May, the Auckland Index rose 14.8%, and the Christchurch Index rose 13.1% and the Other South Island Index increased by 5.4%. The National Index increased 8.7% compared to May last year.

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Full release with charts:REINZ_Residential_Press_Release_May_2013.doc
See also: REINZ_Residential_Market_Statistics__May_2013.pdf | REINZ_Regional_Data_May_2013.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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