14 February 2014
Softer Prices and Volumes in January Market
Summary
•4,719 dwellings sold in January 2014, down 4.3% on January 2013
•National median price eased $25,000 to $402,000 (-5.8%) from record high set in December
•Nelson/Marlborough reached a new high median price
•More than 1 in 5 sales were by auction in the 12 months to January 2014
REINZ, the most up to date source of real estate data in New Zealand, announced today that there were 4,719 dwelling
sales in the month of January, down 4.3% on January last year and down 17.0% compared to December. The national median
price of $402,000 was an increase of $32,000 or 8.6% compared to January 2013, and a decrease of $25,000 from December
2013. Nelson / Marlborough reached a new high median price of $380,000.
Real Estate Institute of New Zealand (REINZ) Chief Executive Helen O’Sullivan says, “There are a number of factors in
play in the market in January, including seasonal factors and the ongoing impact of restrictions on high loan to value
lending. As a result it is difficult to get an entirely clear steer on the direction of the market this month.“
“Volumes are still strong relative to the last five years, but are down 4.3% overall on the same time last year. The
softer volume result continues a pattern that began in November and continued in December; however, market feedback
suggests that first homebuyers may be tentatively returning – with some assistance - to certain markets. This is by no
means a consistent message, with views decidedly mixed outside of the main cities.”
“The national median price is up $32,000 or 8.6% on the same time last year, but down $25,000 or just under 6% from
December 2013. This does suggest a softening price trend, which would come as a relief to many commentators. However
January data is often impacted by the seasonal mix of properties, with fewer high value properties coming to market in
this month. The Stratified House Price Index, which adjusts for some of the mix issues, is down by 2.2% compared with
December 2013”.
“Also of interest in the month is the small but steadily increasing number of properties coming to market in
Christchurch being sold on an “as is, where is” basis – that is, damaged and unrepaired. Prices achieved can range from
full value for lightly damaged properties to land value less demolition costs for severely damaged dwellings. We will be
taking a close interest in this trend as it develops.”
Sales Volumes
REINZ data shows there were 4,719 unconditional residential sales in January, a 4.3% fall on January 2013, and a fall of
17.0% from December. A fall from December volumes is to be expected given that many campaigns will be timed to start in
the latter half of the month after the holiday season ends, and transactions therefore don’t conclude in that calendar
month. On a seasonally adjusted basis the number of sales was 1.1% lower compared to December, indicating that the
number of sales in January was lower than would normally be expected for this time of the year.
Four regions recorded increases in sales volume compared to January last year, with Central Otago Lakes recording the
largest increase of 39.8%, followed by Northland with 11.9% and Hawkes Bay with 8.6%. Four regions recorded an increase
in sales volume compared to December, with Manawatu/Wanganui recording the largest increase of 20.1%, followed by
Taranaki with an increase of 6.1% and Central Otago Lakes with an increase of 5.5%.
While the total number of sales was down 4.3% compared to January 2013, the number of sales below $400,000 fell by
15.6%. This follows a fall in sales below $400,000 of 16.8% between December 2012 and December 2013. 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 $25,000 (-5.9%), from $427,000 in December, to $402,000 in January. Compared to
January 2013 the national median house price increased by $32,000 (+8.6%), with 10 regions recording an increase in the
median price. 69% of the increase in the national median price compared to January last year occurred in Auckland and
13% occurred in Waikato/Bay of Plenty. Christchurch contributed 10% of the increase in median price over that period.
Together these three regions accounted for 92% of the increase in the median price between January 2014 and January
2013.
Nelson/Marlborough recorded a new median high in January of $380,000. Auckland’s median price however softened, down
$31,000 from December 2013. Compared to January 2013 Nelson/Marlborough recorded the largest increase in median price,
up 11.8%, followed by Auckland with 11.7% and Otago with 10.9%.
The REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can impact on the
median price, is 7.7% higher than January 2013. The Auckland Index has risen 14.0% compared to January 2013, with the
Christchurch Index up 10.0% and the Wellington Index down 1.1%.
Days To Sell
Dwellings took 11 days more to sell in January compared to December at 43 days. Compared to January 2013, the median
number of days to sell was two days longer. Four regions saw an improvement in the number of days to sell between
January 2013 and January 2014, with Wellington recording the largest improvement of eight days. Waikato/Bay of Plenty
saw an improvement of seven days and Taranaki saw an improvement of five days.
For the month of January, Canterbury/Westland recorded the shortest days to sell at 35 days, followed by Auckland at 38
days, and Wellington at 42 days. Northland and Hawkes Bay recorded the longest number of days to sell at 61 days,
followed by Waikato/Bay of Plenty and Manawatu/Wanganui with 53 days. Over the past 10 years the median days to sell for
the month of January has averaged 45 days across New Zealand.
Auctions
Nationally there were 375 dwellings sold by auction in January representing 8.0% of all sales and a reduction of 74 on
the number of dwellings sold by auction in January 2013. Auctions have been increasingly favoured as a sales method in
certain centres over the past year; for the 12 months to January 2014 the total number of sales by auction reached
16,431 or 20.6% of all sales, compared to 12,168 or 16.3% of all sales for the 12 months to January 2013.
Transactions in Auckland again dominated the auction market in January, representing 71.7% of the national total of
auction sales. 15.5% of all dwelling sales in Auckland were by auction in January; down from the 18.3% of sales by
auction in January 2013. Sales by auction in Waikato/Bay Of Plenty accounted for 13.3% of the national total,
Canterbury/Westland accounted for 5.9% of the national total, and all other regions combined accounted for the remaining
8.8% of auction sales in January 2014.
Further Data
Across New Zealand the total value of residential sales, including sections was $2.33 billion in January, compared to
$3.07 billion in December, and $2.24 billion in January 2013. For the 12 months ended January the total value of
residential sales was $40.20 billion.
The breakdown of the value of properties sold in January 2014 compared to January 2013 is:
January 2014
$1 million plus2224.7%$600,000 to $999,99982117.4%$400,000 to $599,9991,35028.6%Under $400,0002,32649.3%All Properties Sold4,719100.0%
January 2013
$1 million plus1673.4%$600,000 to $999,99971114.4%$400,000 to $599,9991,29926.3%Under $400,0002,75655.9%All Properties Sold4,933100.0%
There were 430 fewer (-15.6%) sales under $400,000 in January 2014 compared to January 2013, compared to a drop of 214
sales (-4.31%) for all price brackets between the two periods.
REINZ Stratified Median Housing Price Index
The REINZ Housing Price Index fell 2.4% compared with December to sit at 3,756.3. Auckland fell by 2.5% in January,
Christchurch fell 1.9%, and Wellington fell by 2.0%. For the 12 months to January, the Auckland Index rose 14.0%, the
Christchurch Index rose 10.0% and the Wellington Index fell 1.1%. The National Index increased 7.7% compared to January
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
For more information:
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.
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