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REINZ warns of tighter housing market heading into summer; Auckland median sale price hits new high; National stratified measure hits new high in Sept

Property
REINZ warns of tighter housing market heading into summer; Auckland median sale price hits new high; National stratified measure hits new high in Sept

The Real Estate Institute of New Zealand (REINZ) is warning of a tighter housing market going into the end of the year after the traditional spring rush of listings was not as strong this year.

That was reflected in rising median house sale prices across the country, REINZ CEO Helen O’Sullivan said.

The median house sale price in Auckland continued to rise, up 1.9% from August to a new record high of NZ$515,000 in September, the REINZ said.

However, despite the rise, a smoother measure of prices - a stratified index developed with help from the Reserve Bank - showed prices in Auckland eased slightly from August.

And while the national median sale price was sitting below its record high even after rising slightly during the month, the stratified measure of house prices across New Zealand hit a fresh high during September.

The REINZ reported a national median house sale price of NZ$371,000 in September, up 6% from a year ago, and NZ$1,000 below its June 2012 peak. The stratified index was up 5% from a year ago.

REINZ reported 5,653 unconditional house sales in September, up 8% from a year ago.

"Over the past 10 years September sales have averaged 2.2% higher than August, indicating that sales this September were weaker than average," O'Sullivan said.

See more in the release below from the REINZ:

Summary

  • Sales up 8 per cent year on year
  • National median house price just below record median
  • National days to sell has fallen by 13 days since February (46 days to 33 days)
  • New record median house price for Auckland and Nelson/Marlborough regions
  • 20% of all sales for the month of September were auction sales, a new national record

A shortage of new listings is causing buyers to make rapid decisions lifting house prices around the country.

“The traditional rush of spring listings has not eventuated this year and the market is tightening as buyers face a limited choice of offerings,” said REINZ Chief Executive Helen O’Sullivan.

“This has been reflected by increases in the median price across much of the country.”

 “Auckland continues to be the key region in terms of price increases and demand for housing, however, other regions are now starting to see pressure building with the median price in five regions within 10% of their record medians and the number of days to sell falling quite rapidly in some parts of the country.”

Data from the Real Estate Institute of New Zealand (REINZ) shows there were 5,653 unconditional sales in September, an increase of 418 sales (+8.0%) compared with the same time last year and a fall of 6.3% compared to August.  Over the past 10 years September sales have averaged 2.2% higher than August, indicating that sales this September were weaker than average. 

The national median house price increased by $1,000 from $370,000 in August to $371,000 in September; an increase of 0.3%.  Auckland’s median house price moved up 1.9 per cent compared to August to a new record median price of $515,000.  Nelson/Marlborough also reached a new record median price of $353,000.  The national median house price is up 6.0% compared to September last year and is $1,000 below the record median price set in June this year. 

Sales volumes

Eight regions recorded increases in sales volume compared to September last year, with Central Otago Lakes recording an increase of 25.9%, followed by Auckland with 17.4% and Waikato/Bay Of Plenty with 15.1%.  Only two regions recorded increases in sales in September compared to August, with Otago recording a 12.8% increase and Central Otago Lakes a 7.4% increase.  Taranaki recorded a 22.1% fall in sales in September compared to August, with Southland recording a 21.5% fall and Manawatu/Wanganui a 16.4% fall in sales. 

Prices

For the month of September, Nelson/Marlborough recorded the highest lift in prices for the month with an increase of 7.0%, followed by Manawatu/Wanganui with 5.1%, and Wellington with 4.2%.  Compared to September 2011, Southland recorded the highest lift in prices with an increase of 17.0%, followed by Central Otago Lakes with 14.4% and Auckland with 8.4%. 

The REINZ Stratified House Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 5.0% higher than September 2011 and is now at a new record high.  The House Price Index for Other South Island also set a new record high in September. 

Days to sell

The national median days to sell improved by two days in September compared to August, from 35 to 33 days, with the number of days to sell also improving by four days compared to September 2011.  Since February this year the number of days to sell has fallen by 13 days, from 46 days in February to 33 days in September, with Taranaki and Southland regions seeing the number of days to sell over the same period fall by 22 days, Waikato/Bay Of Plenty seeing a fall of 21 days and Central Otago Lakes seeing a fall of 18 days.  Auckland region saw a fall of eight days and Canterbury/Westland a fall of six days.

For the month of September, Canterbury/Westland and Southland recorded the shortest days to sell at 29 days, followed by Auckland with 30 and Otago with 32 days.  Northland recorded the longest number of days to sell at 72 days, followed by Hawkes Bay with 46 days and Central Otago Lakes with 45 days.  Over the past 10 years the median days to sell for the month of September has averaged 34 days across New Zealand.

Auctions

Nationally there were 1,128 dwellings sold by auction in September representing 20.0% of all sales, up from 674 sales in September 2011 representing 12.9% of all sales.  This is a new national record for the percentage of sales by auction and beats the previous high of 18.4% reached in August 2012.  Auction sales in Auckland also reached a new record with more than 37% of all sales in the region in September sold by auction.

Transactions in Auckland again dominated the auction market, representing 74.8% of the national total of auction sales.  37.4% of all dwelling sales in Auckland were by this method in September; this was up strongly from the 24.0% of sales by auction in September 2011.  Sales by auction in Waikato/Bay Of Plenty accounted for 10.2% of the national total, Canterbury/Westland accounted for 6.8% of the national total, and all other regions combined accounted for the remaining 8.2% of auction sales in September 2012.

House price index

Select chart tabs

stratified housing price measures
Source: REINZ
stratified housing price measures
Source: REINZ
stratified housing price measures
Source: REINZ
stratified housing price measures
Source: REINZ
stratified housing price measures
Source: REINZ
stratified housing price measures
Source: REINZ

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30 Comments

Some positive new for home owners . Hopefully prices will continue to stay bouyant and give a lift to the economy in 2013 while rates stay low.

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How do high house prices give a lift to the economy without them being driven by fundamental economic strength (which is not the case here).

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Because when the punters 'have' more money, they are more confident and do more spending.

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But they don't "have" more money unless they borrow it against the equity (which equals more debt), or spend less than they earn and rising house prices don't increase earnings.

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Missing the point.

Property owners feel richer with stats like these coming out every month - therefore they may choose to dine at Euro instead of eating tinned beans at home, decide to put in a full swimming pool instead of just a spa etc etc.

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SK, You're missing the point my friend.... when it's as part of widespread economic health it's a good thing. As a part of a growing bubble in a dire economy like we have now, people are unlikely to go out and spend, they're likely to sit tight and see what happens.... this is evidenced by the fact that nobody is actually cashing in their chips and selling up and that the property market is largely stalled with extremely low sales volumes and stock in the market.

 

But hey, keep singing from the same songsheet you always do SK, it seems that some fools are still believing it, for now.

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Not missing the point at all.

 

If they "have" the money to dine at Euro or put in a full swimming pool (or even a spa for that matter) rising house prices aren't going to change or modify that decision. If rising house prices mean they are more likely to borrow for those renovations then it is only more spending via more debt.

If they can only afford to eat tinned beans at home then rising house prices won't mean they eat at Euro.  It does not increase the difference between spending and earning.

 

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A person who can afford to eat at Euro but chooses not to because things are a little shaky is more likely to eat at Euro when he hears his house is worth 50k more this month than last.
 

Which part of that is difficult to comprehend?

 

Actually I'd rather eat tinned beans than Simon Gaults food - bad example!

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They might not be adding more debt, just not paying off as much as they could be.

 

A lot of people who were freaked out by the GFC started decreasing their spending and increasing their mortgage payments, and they put all the interest they saved due to rate cuts into their mortgage. When the news looks a bit rosier (house prices didn't crash like predicted, NZ growth rates fairly positive, unemployment not increasing, etc) they will lower their mortgage repayments and splash the rest (on Euro and Swimming Pools).

 

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You are missing another point.

No one with a brain is cashing up now - because there is plenty of upside remaining.

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That's probably the single biggest reason for lack of homes on the market - why sell now if your house or investment property increases another 10% over the next 12 months and in the meantime you are only paying 4.95% on the mortgage.

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The reason why rates are so low around the world is because the accredited investors have done exactly that; cashed up.

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really, actually a number of property investors are selling part of their portfolio, just one or two to reduce debt, have a million liquid, smart poeple learn especially as some have been given a second chance, low interest rates saved them last time.

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NZ house prices have room to move up to match some of the house prices in central Australian suburbs. We have some catching up on this. We could rise on average another 2-5% next year.  House prices are important for confidence in the NZ economy.  People will only pay what they think they are worth and are being cautious with their purchases.Generally house price inflation is back to normal trend per annum.   

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And do you suggest that central Auckland incomes will rise to that seen in central Sydney or Melbourne to siut? If not then keep drinking the kool-aid!

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I'm sure our house prices could rise to Mumbai levels without a rise in incomes...

Not sure why anyone would think that house prices in big cities has anything to do with income levels - you just need to have a look at examples around the world to see that.

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We will never match the extreme property prices in central Sydney or Melbourne but we can close the gap by 10-15% . In relative terms Australia prices have boomed quicker and steeper than Auckland prices.  the suburbs just outside the city centre in Auckland have some catch up in prices now with the central suburbs having a good 2012 so maybe we will see this next year and throughout the rest of the country spreading.

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"Australia prices have boomed quicker and steeper than Auckland prices" - proof that a capital gains tax is pointless!

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Silly statement. The family home is not subject to capital gains tax. Stamp Duty is the killer.

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Yesterday: A property developer client from southern NSW. Reviewing their strategic business plan. Has just purchased several residential properties in the North Island. Total transaction costs $2,000 per dwelling. Same in NSW would have been $50,000. Plan is to sell in 12 months time. No CGT in NZ. Would be in NSW. They're coming.

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Olly Newland will be proved right the end when he predicted substantial house price rises because of building shortages, leaky homes, low interest rates , GST, etc etc.

The gloom merchants are very quiet now aren't they?

Maybe they are too busy paying rent having missed out by convincing themselves that the sky was falling.

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I'm paying about $100 a week in rent in the central suburbs and banking about a grand a week, while all ky friends with mortgages are struggling to make ends meet, even on 5% interest rates. At this rate I wont need a mortgage when the crash comes :)

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If you are in the central suburbs of Auckland the property you are renting has probably increased in value by $200,000 in the last 18 months versus your savings of  $78,000. I think I would prefer to own and enjoy a 4.95% Kiwi Bank mortgage.

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Erm. it's arguable that if there is mortgage involved, 4.95% or otherwise, that you may own the house, but the mortgage owns you.

 

And, to be fair, you should also include a scenario of where the participants would be if things went the other way... IE: If she bought and it went down 200k.

 

 

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Never keen on telling Olly's "whole story" are you big daddy?

Remember what Olly said about this little boom showing the signs of a dangerous bubble?

 

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A $100 a week will only pay rent for a broom cupboard.
Espirit is not quite telling the whole truth or he's sharing a flat with a bunch of co-losers.

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Hah...'co-losers'...classic!!

Thanks BD for all your help with leading us through the property mine field and also your contributions in improving the English dialect...give my regards to Oli when you see him next..Cheers!!

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People that call others loosers, in my opinion, need to take a long hard look at themselves.

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People that misspell 'losers', in my opinion, need a take a long hard look at a dictionary.

:-)

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BD, paying $100 per week is possible. I have a friend who ran a flat in a leafy suburb, 4 bedrooms, got in flatmates, ended up paying about $70 per week because the flatmates covered the majority of the rent without even knowing. You just have to make people believe things, in this case rooms in a flat, are worth a lot more than they actually are.

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