Strong November puts bounce back in Spring

News Release 10 December 2014

Strong November puts bounce back in Spring

Summary

• 7,416 dwellings sold in November 2014, up 12.2% on October and up 6.5% on November 2013
• National median price of $455,750, up $25,750 on October and up $30,750 on November 2013 to set a new record median
• Auckland median price reached a new record of $670,000, with Waikato/Bay of Plenty, Wellington and Canterbury/Westland also setting new record medians
• Days to sell remained steady at 34 days compared to October, and eased three days compared to November 2013
• 1,664 dwelling sold by auction in November, representing the third highest number of dwellings sold by auction

REINZ, the most up to date source of real estate data in New Zealand, announced today that there were 7,416 dwelling sales in the month of November, up 6.5% on November 2013 and up 12.2% compared to October. The national median price was $455,750 for the month of November, an increase of $30,750 or 7.2% compared to November 2013, and an increase of $25,750 or 6.0% from October 2014.

Real Estate Institute of New Zealand (REINZ) Chief Executive Helen O’Sullivan says, “The November data shows there was an element of buoyancy returning to parts of the real estate market with new record median prices at the national level, along with regional records for Auckland, Wellington, Canterbury/Westland and Waikato/Bay of Plenty; the four largest markets representing 78% of all sales in November. Sales volumes have also picked up in many regions, with the strongest surge in activity in Waitakere City in the Auckland region. Commentary from around the regions suggests that the ‘top end’ of a number of regional markets are performing well, with the middle and lower ends doing less well.”

“Closer investigation of November’s data shows that dwellings being sold for more than $1 million are seeing the strongest increase in price growth (+10%), along with an increasing share of sales, while those at the other end of the scale are seeing much lower price growth (under 4%) and flat to declining sales volumes. Further, on a seasonally adjusted basis the median house price has increased by 3% over October, compared to 6% for the raw data. For Auckland the difference is even more marked, with a seasonally adjusted increase of just 1.3% compared to 4.6% for the raw data.”

“This suggests that the top end of the market is driving the overall rise in the national and some regional median prices, while those dwellings in the lower deciles are seeing less price growth and a lack of buyer capacity which may be related to the LVR restrictions currently in place.”

Sales Volumes
REINZ data shows there were 7,416 unconditional residential sales in November, a 12.2% increase on sales recorded for October, and a 6.5% rise from November 2013. Typically, sales in November are higher than October, being the third busiest month of the year behind March and May. On a seasonally adjusted basis the number of sales was up 11.2% on October and up 12.3% compared to November 2013.

10 regions recorded an increase in sales volume compared to October with Auckland recording the largest percentage increase of 19.9%, followed by Otago with 17.6% and Waikato/Bay of Plenty with 13.8%. Compared to November 2013 10 regions recorded a increase in sales volume with Otago recording the largest increase of 24.9%, followed by Waikato/Bay of Plenty with an increase of 14.3% and Nelson/Marlborough with an increase of 13.6%.

Prices
The national median house price rose $25,750 (+6.0%) to $455,750 compared to October. Compared to November 2013 the national median house price increased by $30,750 (+7.2%), with 11 regions recording an increase in the median price. On a seasonally adjusted basis the national median house price rose 3.0% compared with October and 7.0% compared to November 2013.

Auckland and Canterbury continue to account for the lion’s share of the movement, with 64% of the increase in the national median price compared to November last year occurring in Auckland, with Canterbury/Westland contributing 12% of the increase and Waikato/Bay of Plenty contributing 10%. Together these three regions accounted for 86% of the increase in the median price between November 2013 and November 2014, with the remaining nine regions contributing 14% of the increase in the median price.

Manawatu/Wanganui recorded the largest percentage increase in median price compared to November 2013, with an 11.7% increase, followed by Hawkes Bay with an 10.3% increase and Central Otago Lakes with a 9.2% increase. Compared to October, Taranaki recorded the largest percentage increase in median price, up 10.7%, followed by Central Otago Lakes with a 7.0% increase and Waikato/Bay of Plenty with a 5.3% 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 6.0% higher than November 2013, at 4,118.7. The Auckland Index has risen 9.4% compared to November 2013, with the Christchurch Index up 9.2% and the Wellington Index down 1.6%.

Days To Sell
Dwellings took 34 days to sell in November, the same as October. Compared to November 2013, the median number of days to sell was three days longer. Three regions saw an improvement in the number of days to sell between November 2013 and November 2014, with Otago recording an improvement of five days and Southland an improvement of four days. Auckland saw its number of days to sell ease by one day.

For the month of November, Canterbury/Westland and Otago recorded the shortest days to sell at 29 days, followed by Auckland at 31 days and Wellington at 32 days. Northland recorded the longest number of days to sell at 56 days, followed by Hawkes Bay at 55 days and Central Otago Lakes at 52 days. Over the past 10 years the median days to sell for the month of November has averaged 34 days across New Zealand.

Auctions
Nationally there were 1,664 dwellings sold by auction in November representing 22.4% of all sales, and a reduction of 54 on the number of dwellings sold by auction in November 2013, although November 2014 was the 3rd highest month for dwellings sold by auction, while November 2013 was the 2nd highest month. For the 12 months to November 2014 the percentage of homes sold by auction was lower than the 12 months to October 2014 at 18.5%, with 13,547 homes sold by auction in the year ending November 2014 compared to 16,421 for the year ending November 2013.

Transactions in Auckland again dominated the auction market in November, representing 72.8% of the national total of auction sales. 41.1% of all dwelling sales in Auckland were by auction in November 2014, compared to 44.5% of all dwelling sales in Auckland in November 2013. Sales by auction in Waikato/Bay Of Plenty accounted for 7.8% of the national total, Canterbury/Westland accounted for 11.4% of the national total, and all other regions combined accounted for the remaining 8.0% of auction sales in November 2014.

Further Data
Across New Zealand the total value of residential sales, including sections was $4.254 billion in November, compared to $3.578 billion in October, and $3.740 billion in November 2013. For the 12 months ended November 2014 the total value of residential sales was $39.421 billion. The breakdown of the value of properties sold in November 2014 compared to November 2013 is:

There were 119 fewer (-3.8%) sales under $400,000 in November 2014 compared to November 2013, compared to an increase of 808 sales (+12.2%) for all price brackets between the two periods.

REINZ Stratified Median Housing Price Index
The REINZ Housing Price Index rose 3.3% compared with October to sit at 4,118.7. Auckland rose 2.5%, Christchurch rose 3.5%, and Wellington rose 0.3%. For the month of November, the New Zealand, Auckland, Christchurch and Other North Island indices all hit new record highs. For the 12 months to November the Auckland Index rose 9.4%, the Christchurch Index rose 9.2% and the Wellington Index fell 1.6%. The National Index increased 6.0% compared to November 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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1. Deciles: For analysis, REINZ breaks real estate sales into 10 prices bands to comapare trends in prices and sales volumes across the market.

REINZ_Regional_Data__November_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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