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Sales volumes fall with prices steady in April market

News Release 12 May 2014

Sales volumes fall with prices steady in April market

Summary

5,670 dwellings sold in April 2014, down 20.2% on April 2013 and down 22.5% on March
All regions saw declines in sales numbers compared to March and to April 2013
The National, Auckland and Christchurch House Price Indices all recorded record highs in March 2014

REINZ, the most up to date source of real estate data in New Zealand, announced today that there were 5,670 dwelling sales in the month of April, down 20.2% on April last year and down 22.5% compared to March. The national median price was $432,250 for the month of April, an increase of $41,750 compared to April 2013, but a fall of $7,750 from March.

Real Estate Institute of New Zealand (REINZ) Chief Executive Helen O’Sullivan says, “The sharp fall in sales volumes in April has impacted all regions, as well as Auckland and Christchurch where much of the price pressure has been in recent times. The fall in April compared to March 2014 and April 2013 deepens the underlying trend for easing sales volumes. April is generally a softer month for real estate sales coming off the back of a generally strong March and with the added complications of school holidays and Easter. However, these factors cannot explain the entire drop between April this year and April last year – the volume of sales has retreated to 2012 levels, and is the seventh lowest April volume recorded by REINZ. ” [The volume of sales in April 2014 was the seventh lowest April sales volume in the 23 years REINZ has published sales data. April 2014 sits between the number of sales recorded in April 1993 (5,484) and April 1995 (5,932). The sales volume in April 2012 was 5,676.]

“The number of sales in the sub-$400,000 category continue to fall faster than the market overall, suggesting that the LVR restrictions are continuing to have an impact on buyer intentions at the lower price points. . The lift in the Official Cash Rate by 0.5% over the past two months is likely to have also had an effect. At the same time there is increasing activity in the $1 million plus category, not only in Auckland but in a number of other centres as well. Commentary from real estate agents around the country indicates that first home buyers are an even scarcer commodity than they were in October and November last year.”

Sales Volumes
REINZ data shows there were 5,670 unconditional residential sales in April, a 20.2% fall on sales recorded for April 2013, and a 22.5% fall from March. April typically includes the Easter break and school holidays, however on a seasonally adjusted basis the level of sales was down almost 8% compared to March and down 18% compared to April 2013.

All regions recorded falls in sales volume compared to March with Southland recording the largest fall of 28.7%, followed by Auckland with 27.2%. Compared to April 2013 all regions recorded a fall in sales volume with Manawatu/Wanganui recording the largest fall of 29.4%, followed by Otago with a fall of 24.3% and Taranaki with a fall of 24.0%.

While the total number of sales was down 20.2% compared to April 2013, the number of sales below $400,000 fell by 31.6%. This follows a fall in sales below $400,000 of 21.9% between March 2013 and March 2014. This may be indicative of fewer sales in the lower price brackets since the imposition of the LVR restrictions.

Prices
The national median house price fell by $7,750 (-1.8%), from $440,000 in March, to $432,250 in April. Compared to April 2013 the national median house price increased by $41,750 (+10.7%), with eight regions recording an increase in the median price. 70% of the increase in the national median price compared to April last year occurred in Auckland, with Canterbury/Westland contributing 15% of the increase and Waikato/Bay of Plenty contributing 13%. Together these three regions accounted for 88% of the increase in the median price between April 2013 and April 2014.

Northland recorded the largest increase in median price compared to April 2013, with a 16.8% increase, followed by Canterbury/Westland with an 11.9% increase and Waikato/Bay of Plenty with a 10.5% increase. Compared to March, Northland also recorded the largest increase in median price, up 12.5%, followed by Southland with 8% and Taranaki with 6.9%.

The REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can impact on the median price, is 8.5% higher than April 2013, at a new record of 3971.2. The Auckland Index has risen 15.2% compared to April 2013, with the Christchurch Index up 13.6% and the Wellington Index up 1.0%.

Days To Sell
Dwellings took one day fewer to sell in April compared to March at 34 days. Compared to April 2013, the median number of days to sell was steady at 34 days. Four regions saw an improvement in the number of days to sell between April 2013 and April 2014, with Central Otago Lakes recording the largest improvement of 10 days. Auckland saw its number of days to sell remain steady at 30 days.

For the month of April, Canterbury/Westland recorded the shortest days to sell at 28 days, followed by Auckland at 30 days and Wellington at 34 days. Northland recorded the longest number of days to sell at 65 days, followed by Hawkes Bay with 54 days and Taranaki with 48 days. Over the past 10 years the median days to sell for the month of April has averaged 36 days across New Zealand.

Auctions
Nationally there were 1,106 dwellings sold by auction in April representing 19.5% of all sales and a reduction of 262 on the number of dwellings sold by auction in April 2013. For the 12 months to April 2014 the total number of sales by auction reached 15,865 or 20.6% of all sales, compared to 13,955 or 18.0% of all sales for the 12 months to April 2013.

Transactions in Auckland again dominated the auction market in April representing 69.8% of the national total of auction sales. 34.9% of all dwelling sales in Auckland were by auction in April, compared to 37.3% of sales by auction in April 2013. Sales by auction in Waikato/Bay Of Plenty accounted for 9.3% of the national total, Canterbury/Westland accounted for 13.9% of the national total, and all other regions combined accounted for the remaining 5.3% of auction sales in April 2014.

Further Data
Across New Zealand the total value of residential sales, including sections was $3.09 billion in April, compared to $4.07 billion in March, and $3.50 billion in April 2013. For the 12 months ended April the total value of residential sales was $39.78 billion.

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

April 2014April 2013
$1 million plus4317.6%3775.3%
$600,000 to $999,9991,18520.9%1,26317.8%
$400,000 to $599,9991,55727.5%1,81625.6%
Under $400,0002,49744.0%3,64851.4%
All Properties Sold5,670100.0%7,104100.0%

There were 1,151 fewer (-31.6%) sales under $400,000 in April 2014 compared to April 2013, compared to a drop of 1,434 sales (-20.2%) for all price brackets between the two periods.

REINZ Stratified Median Housing Price Index
The REINZ Housing Price Index rose 0.1% compared with March to sit at 3,971.2. Auckland rose 2.0% in April to reach a new record high, Christchurch rose 4.4% to also reach a new record high, and Wellington rose 3.8%. For the 12 months to April, the Auckland Index rose 15.2%, the Christchurch Index rose 13.6% and the Wellington Index rose 1.0%. The National Index increased 8.5% compared to April 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

----- ENDS -----

REINZ_Residential_Property_Market_Report__April_2014.pdf
REINZ__Regional_Data_April_2014.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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