The REINZ has released the following story today. Normally the Institute is fairly cautious with its releases but the facts cannot be fudged in this instance. The case for fixing interest rates is getting stronger. (See my last article). The Budget will be presented in May and it wouldn’t surprise me in the least if there were some announcement concerning property in that document. Either that or the Reserve Bank will do the job instead. Either way it won’t be totally unexpected.
News Release 11 April 2013
Stellar Month for Real Estate Market in March
8,128 houses sold in March 2013, an increase of 23% on February and up 11% on the same month last year, the largest number of sales in a single month since May 2007 Auckland and Christchurch drive an 8.1% or $30,000 increase in the national median house price compared to March 2012, to a new record of $400,000 Auckland and Canterbury/Westland also set new records of $562,000 and $359,000, respectively Stratified Housing Price Index reaches new record high of 3,631.4 1,793 houses sold by auction; a new record representing over 22% of all sales in March 2 of every 5 houses sold in Auckland in March were by auction
Residential property sales soared in March with REINZ data (the most up to date market snapshot –see Editor’s note at end of this release) showing the number of sales climbed to the highest level for a month since May 2007, with the number of sales up 23% on February 2013. The national median price rose 8.1% compared to March 2012 to reach a new record high of $400,000, the first time the national median house price has breached the $400,000 level.
The Chief Executive of the Real Estate Institute of New Zealand (REINZ), Helen O’Sullivan, says price levels in Auckland and Canterbury are having a disproportionate impact on the national picture and potentially skewing perceptions of the overall market.
“Analysis by REINZ shows that 90% of the increase in the median price between March 2012 and March 2013 of $30,000 came from just two regions, Auckland and Canterbury/Westland. Together these two regions represent 52% of national house sales, indicating that the remaining 10% of the increase came from the remaining 10 regions which cover 84% of New Zealand geographically.”
“There’s a real danger that the Auckland housing market is mistaken for the New Zealand housing market, and that regulatory decisions will be made on the assumption that conditions in Auckland and Canterbury are replicated across the rest of the country.”
“Supply shortages in Auckland and Christchurch continue to be the main factor in those two markets, resulting in double digit price increases and new record prices, while the number of days to sell reaches near record lows. Across the rest of the country
while activity is picking up, price gains are far more modest. To illustrate this, five regions, representing 24% of sales in March recorded annual price increases of less than 1.0%.”
REINZ data shows there were 8,128 unconditional residential sales in March, an increase of 798 sales (+10.9%) compared with the same time last year and an increase of 22.6% compared to February 2013. The increase over February on a seasonally adjusted basis was 3.6%, indicating that sales were stronger than what would normally be expected for this time of the year.
All but three regions recorded increases in sales volume compared to March last year, with Northland recording an increase of 42.8%, followed by Auckland with 17.9% and Waikato/Bay of Plenty with 15.3%. All but three regions recorded an increase in sales volume in March compared to February, with Auckland recording an increase of 40.0%, followed by Northland with 31.8% and Waikato/Bay of Plenty with 23.2%.
The national median house price rose by $18,000 (+4.7%), from $382,000 in February, to $400,000 in March to reach a new record high. Auckland and Canterbury/Westland both recorded new record highs in March, with Auckland’s median price increasing by $27,000 (+5.0%) to $565,000 and Canterbury/Westland’s median price increasing by $4,000 (+1.1%) to $359,000. Despite these records, four regions recorded falls in the median price in March compared to February.
Compared to March 2012 the national median house price increased by $30,000 (+8.1%), although one region saw a drop in the median price and another four recorded increases of less than 1.0%. Compared to March 2012 Central Otago Lakes recorded the largest increase in median price, up 20.3%, followed by Auckland with 13.5% and Canterbury/Westland with 12.2%.
The REINZ Stratified Housing Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 8.6% higher than March 2012 and increased 2.4% compared to February. The Auckland Stratified Housing Price Index is up 16.1% compared to March 2012, while the Christchurch Stratified Housing price Index is up 7.2%. By contrast, Wellington’s Stratified Housing Price Index is unchanged from February 2013, and up just 3% from March 2012.
Days To Sell
Houses took eight days fewer to sell in March 2013, compared to February, improving from 39 days in February to 31 days in March. Compared to March 2012, the number of days to sell improved by four days. Five regions saw an improvement in the number of days to sell between March 2012 and March 2013, with Canterbury/Westland recording the largest improvement of seven days. In some areas of Christchurch homes are being sold in less than 20 days from listing.
For the month of March, Canterbury/Westland recorded the shortest days to sell at 24 days, followed by Auckland, Wellington and Otago with 29 days. Northland recorded the longest number of days to sell at 77 days, followed by Central Otago Lakes with 70 days and Waikato/Bay of Plenty with 49 days. Over the past 10 years the median days to sell for the month of March has averaged 34 days across New Zealand.
Nationally there were 1,793 dwellings sold by auction in March representing 22.1% of all sales – a new record, an increase of 51.0% on the number of dwellings sold by auction in March 2012. Auctions are increasingly favoured as a sales method in certain centres; for the 12 months to March 2013 the total number of sales by auction reached 13,325 or 17.5% of all sales, compared to 7,924 or 12.1% of all sales for the 12 months to March 2012.
Transactions in Auckland again dominated the auction market in March, representing 76.9% of the national total of auction sales. 41.1% of all dwelling sales in Auckland were by auction in March; this was up strongly from the 29.6% of sales by auction in March 2012. Sales by auction in Waikato/Bay Of Plenty accounted for 8.3% of the national total, Canterbury/Westland accounted for 9.0% of the national total, and all other regions combined accounted for the remaining 5.8% of auction sales in March 2013.
Across New Zealand the total value of residential sales, including sections was $4.11 billion in March, compared to $3.15 billion in February, and $3.35 billion in March 2012. For the 12 months ended March 2013 the total value of residential sales was $35.71 billion.
The breakdown of the value of properties sold in March 2013 is:
$1 million plus 492 6.1%
$600,000 to $999,999 1,477 18.2%
$400,000 to $599,999 2,117 26.0%
Under $400,000 4,042 49.7%
All Properties Sold 8,128 100.0%
REINZ Stratified Median Housing Price Index
The REINZ Housing Price Index increased 2.4% in March compared with February to sit at 3,631.4 to reach a new record high. Auckland rose 4.7% in March, followed by Other North Island with 1.2%. For the 12 months to March, the Auckland Index rose 16.1%, and the Christchurch Index rose 7.2% compared to the National Index increase of 8.6%. Outside of the main centres, the Other North Island Index was the next strongest with an increase of 4.4% for the 12 months to March 2013.
* 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