Record Median House Price For New Zealand In November 2011

News Release 9 December 2011

Record Median House Price For New Zealand In November 2011

Real Estate Institute of New Zealand (REINZ) data on the New Zealand housing market for November 2011 showed 6,008 unconditional sales for the month, up 870 sales (+16.9%) compared to November last year. The November figure is 1,001 sales higher than last month (+20.0%) and rose by 4.3% on a seasonally adjusted basis.

The national median house price rose by $8,500 to $367,500 (+2.4%) in November compared to October and is also up $7,500 (+2.1%) compared with November 2010. This is a new record median house price for New Zealand and exceeds the previous record of $365,000 reached in March 2011.

All regions recorded an increase in sales volumes during November compared to October, with Northland reporting the largest increase at 33.3% and Southland the smallest increase at 6.9%. Compared to November 2010, Auckland had the largest increase in sales volumes at 26.7%, followed by Northland (+25.9%) and Waikato/Bay of Plenty (+21.5). Only two regions recorded small falls compared with November 2010, with Otago down just 2.7% and Wellington down just 1.9%.

In addition to the national median house price reaching a new record level, the Auckland median house price also reached a new record of $490,000 in November. This exceeds the previous record high of $479,500 reached in April 2011. The REINZ Housing Price Index for Auckland is now at the same level that it reached at the peak of the market in July 2007, although most other markets tracked by the REINZ Housing Price Index remain below the peak. Of note in Auckland has been the rapid increase in the number of properties being sold at auction with almost 27% of unconditional sales in November being sold at auction, an all time high for the region.

For the month of November, Hawkes Bay recorded the highest lift in prices for the month (+11.3%), followed by Otago (+5.6%) and Auckland (+5.4%). Compared to November 2010, Canterbury / Westland recorded the highest lift in prices (+9.1%), followed by Hawkes Bay (+7.3%) and Otago (+5.6%).

“The lift in volumes for November is positive following the somewhat muted sales numbers for September and October”, said REINZ Chief Executive Helen O’Sullivan. “While there may be some element of ‘catch up’ from these slightly quieter than expected months, there is a sense of buyers and sellers being ready to commit and clear the decks post Rugby World Cup before the end of the year. “

“While the data coming from the housing market is generally positive, the volume figures say recovery, not boom as some commentators have suggested. In 2007 the market reported just over 92,000 transactions in the 12 months to December; the 2011 year to date total is just under 56,000 transactions with the month of December yet to come, demonstrating that the level of activity is still well below “boom” levels. ”

“With that said, we would love to see increased supply of new homes coming through in the form of improved consent figures, as reports indicate that the lack of new stock remains a concern.”

The national median ’days to sell’ remained steady at 35 days in November, and is a five day improvement on the 40 days recorded in November 2010.

Otago again recorded the shortest days to sell at 30 days (no change), followed by Canterbury/Westland with 31 days (-1 day) and Auckland with 33 days (no change). Northland recorded the longest number of days to sell at 53 days (+3 days), followed by Central Otago Lakes at 51 days (-6 days) and Taranaki at 48 days (+6 days.) Over the past five years the median days to sell has averaged 41 days across New Zealand.

Further Data

Across New Zealand the total value of residential sales, including sections was $2.67 billion in November, compared to $2.15 billion in October 2011, and $2.20 billion in November 2010.

The breakdown of the value of properties sold in November 2011 is:

$1 million plus 227 3.8%
$600,000 to$999,999 796 13.2%
$400,000 to $599,999 1,596 26.6%
Under $400,000 3,389 56.4%
All Properties Sold 6,008 100.0%

The REINZ Housing Price Index rose 1.1% in November compared with October. The REINZ Housing Price Index recorded increases in all markets apart from Other South Island. Compared to November 2010 the REINZ Housing Price Index rose 2.6%, and the Index is now 2.3% below the peak recorded in November 2007 (see table and chart below).

Also of note is that according to the REINZ Housing Price Index, Auckland has now recovered to equal the previous peak recorded in July 2007, although most other markets remain below the 2007 peak, notably Other North Island.

REINZ Stratified Median Housing Price Index Chart

REINZ Stratified Median Housing Price Index Statistics

* 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

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.

Regional Commentaries – November 2011

Northland

The Northland region saw the strongest lift in sales across all regions in November compared to October, although this comes after a significant fall in volumes in October. Compared to November 2010, Northland had the second strongest lift in volumes across all regions in New Zealand.

Prices have also continued to firm in Northland during November following on from a modest lift in October. The median price across Northland has increased by $15,000 since September.

The number of days to sell for Northland eased by three days to 53 days in November compared to 50 days in October, however, the number of days to sell improved by eight days compared to November 2010.

Auckland Region

The Auckland region recorded a new record high median house price in November with a 5.4% lift compared to October 2011, the third highest increase across all regions in New Zealand. Particular price strength was recorded in Manukau City and Auckland City. The Auckland region also recorded the strongest lift in volumes across New Zealand compared to November 2010 and the fourth strongest lift in volumes compared to October 2011.

Agent reports indicate that listings remain relatively tight, and very good results being achieved at auction. As noted above almost 27% of all sales across the region in November were auctions, a record high
The number of days to sell for Auckland remained steady at 33 days in November compared to October, however, the number of days to sell improved by two days compared to November 2010.

Waikato/Bay of Plenty/Gisborne

Volumes across the Waikato/Bay of Plenty region in November were stronger with noticeable increases being recorded in Waikato Country, Eastern BOP Country, Hamilton City, Mount Maunganui/Papamoa and Tauranga. The lift in volumes for Mount Maunganui/Papamoa follows on from a strong lift in October as well. While volumes were up compared to October and November 2010 median prices across the region eased slightly against the median prices from the same period, although Tauranga recorded a solid increase (12.4%) in the median price over 2010’s figures. Price increases over the previous month’s figures were seen in Rotorua with a lift of 8.1% and Gisborne City recording a lift of 12.1%.

The number of days to sell for Waikato/Bay of Plenty improved by five days to 43 days in November, compared to 48 days in October, and improved by 16 days compared to November 2010, the largest improvement of any region across New Zealand.

Hawke’s Bay

Volumes in Hawke’s Bay increased by almost 24% in November, following three months of falling volumes, indicating some degree of ‘catch up’ in the number of sales during the month. Agent reports suggest a more robust market with increasing attendances at open homes, increasing auction sales and the emergence of multiple offers on properties.

The median price for the region also increased by more than 10% in November, giving Hawke’s Bay the largest lift in the median price across New Zealand, although this also comes after the median price weakened in October.

The number of days to sell for Hawke’s Bay improved by six days to 43 days in November, compared to 49 days in October, and improved by 13 days compared to November 2010.

Manawatu/Wanganui

The Manawatu/Wanganui region recorded something of a mixed bag with a strong lift in sales volumes in Palmerston North compared to October and weakness across the rest of the region. Anecdotal evidence suggests that buyer activity in the lower end of the market is increasing with the emergence of multiple offers starting to put pressure on buyers to make decisions.

The median price across the region moved up by 3.7% compared to October, with Feilding’s median price increase by 17.5% following on from an almost 10% lift in October. The strong increase in the median price in Wanganui City follows a 22% fall in the median price in October.

The number of days to sell for Manawatu/Wanganui improved by five days to 44 days in November, compared to 49 days in October, and improved by six days compared to November 2010.

Taranaki

The Taranaki region reported a further increase in sales volumes in November following on from a solid increase in October. Most of the strength in activity is in New Plymouth; with the sharp rise in sales volumes for Hawera following on from a drop in October. As has been the case in a number of regions a rise in sales volumes has been accompanied by an easing in the median price.

Anecdotal evidence suggests that buyers are becoming more active in the region, although listings continue to be in short supply.

The number of days to sell Taranaki eased by six days to 48 days in November, compared to 42 days in October, and improved by one day compared to November 2010.

Wellington

Volumes across the Wellington region rose in most markets with Eastern Wellington continuing its strong lift in volumes from October and Central Wellington also recording a further lift in volumes. Southern Wellington also recorded a sharp lift in volumes after a modest increase in October.

The median price across the Wellington region eased back, with most of the drop being recorded in the northern and western parts of the region and median prices generally firming in the centre and to the east. Wellington recorded the worst price performance of all regions compared to November 2010.

The number of days to sell for Wellington eased by one day to 34 days in November, compared to 33 days in October, and improved by two days compared to November 2010.

Nelson/Marlborough

Volumes in the Nelson/Marlborough region increased only modestly in November and follows on from a very minor increase in October. Volumes increased more strongly in Nelson and Richmond, after falling back in October.

The median price across the region eased back by almost 4.0% compared to October but held steady compared to November 2010. Anecdotal evidence suggests that buyers in the region remain cautious, although there is increasing interest from buyers coming from other South Island locations.

The number of days to sell for Nelson/Marlborough eased by five days to 38 days in November, compared to 33 days in October, and improved by 11 days compared to November 2010.

Canterbury/Westland

All markets in Canterbury/Westland apart from Rangiora recorded and increase in sales volume in November, although the region overall recorded a lower increase in sales than the national total. Sales volumes were stronger in Mid Canterbury, South Canterbury and West Coast.

Agent reports indicate that the Christchurch market has steadied after an initial influx of listings at the beginning of spring, with the overall number of listings easing back. Red Zone buyers are showing strong interest in the proposed new subdivisions, although the time taken for these new developments to grind through the approval process is seeing some buy an interim property with the plan to purchase again later in the new subdivision.

The median price for the region has increased by just over 9.0% compared to November 2010, and Christchurch City also showing an increase in the median price of more than 9.0%. Markets close to Christchurch City have also shown strong increases in prices compared to November 2010, with markets further away showing lower price increases.

The number of days to sell for Canterbury/Westland improved by one day to 31 days in November, compared to 32 days in October, and improved by 10 days compared to November 2010.

Central Otago Lakes

The Central Otago Lakes region recorded a 25% increase in sales in November compared to October, although this came after a drop in sales volume during October. Compared to November 2010, volumes are up strongly in Central, although slightly weaker in Queenstown. Anecdotal evidence suggests that there is still a shortage of listings in the region, with an increasing number of frustrated buyers in the market, particularly below the $600,000 level.

The median price across the region eased in November, after a 9% lift in October, although the median price is continuing to weaken in Queenstown.

The number of days to sell for Central Otago Lakes improved by six days to 51 days in November, compared to 57 days in October, and improved by five days compared to November 2010.

Otago

Sales volume in Otago rose at about half the rate of the national lift in volumes compared to October, with the region recording the largest fall in sales volume across the country compared to November 2010, although North Otago recorded a strong lift in volumes compared to November 2010.

The median price across the region improved by more than 5% compared to October, with North Otago again showing some additional strength in the rise in the median sales price. Anecdotal evidence suggests that market is most active at below the $200,000 level with a continuing shortage of listings frustrating buyers.

The number of days to sell for Otago remained steady at 30 in November, with Otago recording the lowest number of days to sell across New Zealand. The number of days to sell improved by five days compared to November 2010.

Southland

The Southland market recorded another modest increase in sales volume compared to October, which was a modest increase over September. The much larger increases in sales volumes reported for northern regions has not been reflected in the deep south. The Gore market was strong in November compared to October and November 2010, although the Invercargill market was relatively weak.

The median house price eased across the region in November compared to October, although this comes after a strong lift in prices during October.

The number of days to sell for Southland eased by nine days to 40 days in November, compared to 31 days in October, and also increased by three days compared to November 2010.

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