Residential Real Estate Market Reflects Good Summer Weather

News Release 11 February 2015

Residential Real Estate Market Reflects Good Summer Weather

Summary

• 4,841 dwellings sold in January 2015, up 2.6% on January 2014
• National median price of $426,000, up $24,000 on January 2014 and down $24,000 on December 2014
• The national median price rose 6.0% in the 12 months to January 2015, while Auckland’s median price increased by 16.0%
• The national median excluding the effect of Auckland sales rose by $6,000 to $341,000, an increase of 1.8% over the same time last year
• 423 dwellings sold by auction in January, reflecting the slowdown in the real estate market over the holiday period.

REINZ, the most up to date source of real estate data in New Zealand, announced today that there were 4,841 dwelling sales in January 2015, up 2.6% on January 2014 and down 31.5% compared to December. The national median price was $426,000 for January, an increase of $24,000 or 6.0% compared to January 2014 and a decline of $24,000 or 5.3% from December.

Real Estate Institute of New Zealand (REINZ) Chief Executive Helen O’Sullivan says, “The data for January reflects the typical summer slowdown at this time of the year, with volumes dropping back and prices easing across the country. December was a strong month, so the slowdown in January was a little more pronounced than usual.

“The continuing strong performance of Auckland prices is vexing commentators and policy makers alike, however the root cause of the problem remains a shortage of property available for sale. Listings across Auckland remain very low by historical standards and this, coupled with continued high demand, is seeing prices inevitably move upwards. Increases in supply from new construction will help to ease this position, but for the present the lack of listings is the main impetus driving Auckland dwelling prices. The data shows that Auckland’s median price increased by 16% over the past 12 months, compared to just 1.8% for the rest of the country.

Sales Volumes
REINZ data shows there were 4,841 unconditional residential sales in January, a 2.6% increase on sales recorded for January 2014 and a fall of 31.5% from December. Typically, sales in January are noticeably lower than in December due to the Christmas break and summer holidays. On a seasonally adjusted basis the number of sales was down 12.2% from December to January, indicating that January sales were lower than what would normally be expected for this time of year. This reflects the strong December volume figures.

All regions recorded a decline in sales volume compared from December to January, with Canterbury/Westland recording the largest decline of 40.9%, followed by Auckland with 35.5% and Hawkes Bay with 33.0%. In comparison with January 2014, eight regions recorded increases in sales volume, with Wellington recording the largest of 19.2%, followed by Waikato/Bay of Plenty with 16.5% and Southland with 15.5%.

Prices
The national median house price declined $24,000 (-5.3%) to $426,000 compared to December. In comparison with January 2014 the national median house price increased by $24,000 (+6.0%), with nine regions recording an increase. On a seasonally adjusted basis the national median house price eased 0.3% compared with December and rose 5.8% compared to January 2014.

Auckland recorded the largest percentage increase in median price compared to January 2014, at 16.0%, followed by Central Otago Lakes at 11.2% and Canterbury/Westland at 8.1%. Compared to December, Southland recorded the largest percentage increase in median price, at 11.9%, followed by Northland at 11.3% and Hawkes Bay at 3.5%.

The REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can affect the median price, is 7.5% higher than in January 2014, at 4,037.3. The Auckland Index rose 15.1% compared to January 2014, the Christchurch Index 4.5% and the Wellington Index 3.0%.

Days To Sell
Dwellings took a median of 42 days to sell in January, 10 days longer than for December, reflecting the usual pattern over the Christmas/New Year period. The median number of days to sell in January 2014 was 43 days. Five regions saw an improvement in the number of days to sell compared to January 2014, with Nelson/Marlborough recording an improvement of 10 days, Hawkes Bay nine days, and Auckland four days.

Auckland recorded the shortest median days to sell in January, at 34 days, followed by Canterbury/Westland at 37 days and Nelson/Marlborough at 39 days. Northland recorded the longest median number of days to sell at 74 days, followed by Taranaki at 67 days and Waikato/Bay of Plenty at 59 days. Over the past 10 years the median days to sell in January has averaged 45 days across New Zealand.

Auctions
There were 423 dwellings sold by auction nationally in January, representing 8.7% of all sales and an increase of 48 on the number sold by auction in January 2014. The percentage of homes sold by auction in the 12 months to January 2015 was 18.5% (13,848 by number), compared to 20.6% (16,431 by number) for the year ending January 2014.

Transactions in Auckland again dominated the auction market in January, representing 78% of the national total of auction sales. 18.7% of all dwelling sales in Auckland were by auction in January, compared to 15.5% in January 2014. Sales by auction in Waikato/Bay Of Plenty accounted for 9.2% of the national total, Canterbury/Westland accounted for 5.2% and all other regions combined accounted for the remaining 7.6% of the national total of auction sales in January 2015.

Further Data
Across New Zealand the total value of residential sales, including sections, was $2.610 billion in January, compared to $4.025 billion in December and $2.330 billion in January 2014. For the 12 months ended January 2015 the total value of residential sales was $40.658 billion. The breakdown of the value of properties sold in January 2015 compared to January 2014 is:

There were 136 fewer (-5.8%) sales under $400,000 in January 2015 compared to January 2014, compared to an increase of 122 sales (+2.6%) for all price brackets between the two periods.

REINZ Stratified Median Housing Price Index
The REINZ Housing Price Index fell 1.0% compared with December to sit at 4,037.3. Auckland fell 1.2%, Christchurch 1.1% and Wellington 0.6%. For the 12 months to January the Auckland Index rose 15.1%, the Christchurch Index 4.5% and the Wellington Index 3.0%. The National Index increased 7.5% 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

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1. Deciles: For analysis, REINZ breaks real estate sales into 10 price bands to compare trends in prices and sales volumes across the market.

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 the index is more likely to reflect genuine property price movements.

REINZ_Residential_Regional_Commentary__January_2015.pdf

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