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Strong Year On Year Sales Growth in July Real Estate Market

News Release 9 August 2012

Strong Year On Year Sales Growth in July Real Estate Market

REINZ_July_Regional_Data.pdf

REINZ_Residential_Market_Statistics_July_2012.pdf

Summary

• Sales up almost 20 per cent year on year
• Continuing strength in Auckland and Christchurch property markets
• House prices up 4.6 per cent in 12 months to July but ease back from last month’s record high
• REINZ Stratified House Price Index at all time high in Auckland and Christchurch


Data from the Real Estate Institute of New Zealand (REINZ) shows there were 5,907 unconditional sales in July, an increase of 979 sales (+19.9%) compared with the same time last year and a decline of 3.7% compared to June. On a seasonally adjusted basis the level of sales in July was about even with June indicating that the change is in line with the seasonal pattern expected at this time of year.

The national median house price eased by $11,000 to $361,000, after reaching a new record high of $372,000 in June. The national median house price is up 4.6% compared to July last year, with Auckland maintaining the $500,000 record median for the third month in a row.


Sales volumes

Almost all regions recorded increases in sales volume compared to July last year, with Taranaki recording an increase of 62.7%, followed by Auckland with 28.2% and Manawatu/Wanganui with 23.6%. Only Southland recorded a fall in sales volume (-5.0%) compared to July last year. July is traditionally a slower month than June and this expected pattern was evident in most regions. However four regions recorded increases in sales compared with June, with Taranaki recording a 31.6% over June followed by an 8.5% increase for Manawatu/Wanganui, 4.5% for Hawkes Bay and a 1.8% increase for Wellington. Auckland recorded a 4.9% fall in sales in July compared to June and Canterbury/Westland recorded a 6.4% fall in sales.

Prices

For the month of July, Otago recorded the highest lift in prices for the month with an increase of 6.0%, followed by Canterbury/Westland with 3.1%, and Hawkes Bay with 1.7%. Compared to July 2011, Northland recorded the highest lift in prices with an increase of 8.5%, followed by Otago with 7.7% and Auckland with 7.5%. The REINZ Stratified House Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 5.2% higher than July 2011 and is now just below the record high set in June. The House Price Indices for Auckland and Christchurch have set new record highs in July.

“Buyer interest in Auckland and Christchurch remains the engine of the New Zealand residential real estate market with Auckland maintaining its record median price of $500,000 for the third month in a row and Christchurch hitting its record median price of $335,000 for the third time since November,” said REINZ Chief Executive Helen O’Sullivan. “In the Auckland real estate market it seems that winter has been cancelled with strong demand right across the city, although the inability of the median price to ‘push on’ indicates that buyers are still cautious about price.

“We are still seeing recovery rather than boom conditions when we compare the number of transactions in July 2012 with earlier years such as July 2003 when over 10,000 transactions were recorded. Buyer caution is also evident in the easing of the national median price this month and the slightly slower pace of transactions in July compared with June.”

Days to sell

The national median ‘days to sell’ eased by one day in July compared to June, from 37 to 38 days, with the number of days to sell also improving by four days compared to July 2011. Over the past five years the median days to sell has averaged 41 days across New Zealand. The record lowest days to sell in a July month was recorded in July 2003 at 28 days.


Canterbury/Westland and Auckland recorded the shortest days to sell at 31 days, followed by Nelson/Marlborough with 38 days. Central Otago Lakes recorded the longest number of days to sell at 76 days, followed by Hawkes Bay and Northland with 62 days.

Nationally there were 922 dwellings sold by auction in July representing 15.6% of all sales, up from 514 sales in July 2011 representing 10.4% of all sales. Transactions in Auckland again dominated the auction market, representing 73.9% of the national total of auction sales. 29.5% of all dwelling sales in Auckland were by this method in July; this was up strongly from the 19.6% of sales by auction in July 2011. Sales by auction in Waikato/Bay Of Plenty accounted for 8.8% of the national total, Canterbury/Westland accounted for 7.5% of the national total, and all other regions combined accounted for the remaining 9.8% of auction sales in June 2012.

Further Data

Across New Zealand the total value of residential sales, including sections was $2.62 billion in July, compared to $2.81 billion in June, and $2.08 billion in July 2011. For the 12 months ended July 2012 the total value of residential sales was $30.64 billion.

The breakdown of the value of properties sold in July 2012 is:

$1 million plus 207 3.5%
$600,000 to$999,999 842 14.3%
$400,000 to $599,999 1,480 25.1%
Under $400,000 3,378 57.2%
All Properties Sold 5,907 100.0%

The REINZ Housing Price Index eased 0.7% in July compared with June to sit at 3,377.1. The REINZ Housing Price Index also once again recorded new record highs in Auckland and Christchurch. Other North Island and Sections were the only two to record falls in July. Compared to July 2011 the REINZ Housing Price Index rose 5.2%, Auckland rose 9.3% and Christchurch 6.6%.

REINZ Stratified Median Housing Price Index Statistics


Click for big version.

* 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

REINZ Stratified Median Housing Price Index Chart


Click for big version.

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.

ENDS

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