November house sales saw the median price rise to a record NZ$383,250 according to data released by the Real Estate Institute of New Zealand (REINZ) today.
There were 7,454 properties traded in the month, up from 6,640 in October, and up 24% from the same month a year ago. March and November are usually the peaks for house sales transactions (see this chart).
The median house price rose only 4.2% however.
In fact, nine of the twelve regions in the REINZ report have a median price lower than the national median. Only Auckland, Wellington and the Central Otago Lakes area have median prices above the national level.
The reason for that is the very strong activity level in the Auckland region with 40% of all sales in November happening in Auckland at a median price 40% higher than the national level.
In 2008, Auckland house prices were 28% higher than the national median; in November 2012 they are 41% higher, a gap that hasn't been this big since 2003.
Auckland house prices rose NZ$50,000 in the year, a gain of 10% to NZ$540,000.
Earlier, one big Auckland agent reported 'average' prices of NZ$627,721 for the properties they sold, a rise of NZ$60,000 in the past year. ('Average' prices can be distorted by a disproportionate number of transactions at the margins; median data reports the middle transaction, and itself is often misunderstood.)
Highest sales in five years
The level of residential house sales in November were the highest for a November in five years, and also the highest for any months over the five years. The REINZ says the lift in volumes is now spreading out to regions other than Auckland.
Westpac chief economist Dominick Stephens noted the REINZ house price index, calculated using stratification that gives an averaging of sales prices for common groups of houses and was developed in partnership with the Reserve Bank, is now 7.3% higher than it was a year ago at 3504.
"This is consistent with our long-held forecast that house prices would rise 6% in 2012 (on the Quotable Value quarterly measure), accelerating to 8% in 2013. If house prices do keep rising as we expect, the Reserve Bank would most likely increase the Official Cash Rate in 2013," Stephens said.
He also said Westpac's economists had long suggested low interest rates would ultimately spark a more generalised house price upturn across New Zealand, not just in Auckland and Canterbury.
"The data is tentatively evolving along those lines, although the full story is complicated," Stephens said.
This is because the Canterbury market has "distinctly" cooled.
"The number of house sales did rise in November, but market turnover is no more vigorous now than it was six months ago. Consistent with unchanged market turnover, house prices have basically stagnated in Christchurch over recent months, and annual house price inflation has dropped to 3.8%. We can only speculate on the cause of the market slowdown in Christchurch. One suggestion is that the Residential Red Zone settlements earlier this year had a price effect that has worn off."
"Another is that people are more confident of Christchurch eventually overcoming its shortage of housing, now that construction activity has gotten moving," said Stephens.
And although Auckland remains the hottest housing market in the country, the City of Sails' market paused for breath in November.
"Seasonally adjusted house sales fell 2.5% after surging 12% in October. And seasonally adjusted prices fell 0.3% in November, but remain over 13% higher than a year ago."
Meanwhile, Stephens said some other regions within New Zealand are closing the gap a little.
"In November, the strongest price increases were recorded in the South Island ex Christchurch, and the North Island ex Auckland and Wellington. And turnover is now rising in many regions of New Zealand, although some pockets of weakness do remain."
Here is the REINZ media release that came with the data. All our related real estate charts are now updated with the latest data.
Ongoing strong demand drove robust sales volume growth in the residential property market during November with the number of sales up 24.1 per cent on November 2011. The national median house price is at a new record of $383,250.
The Chief Executive of the Real Estate Institute of New Zealand (REINZ), Helen O’Sullivan, says that despite a surge in new listings during spring, demand continues to outstrip supply in key markets such as Auckland.
“The activity in the Auckland market is now starting to see some spill over into other parts of the country, with increased buyer activity, although there are some remaining markets which are yet to see this effect. The lift in national sales volume to a five year high and the new record medians in Auckland and Otago is indicative of the real estate market gaining in confidence. Volumes remain well below the previous market highs set in the period from 2003 – 2006, indicating that tight supply remains the key factor behind increasing prices.”
“The Auckland market is increasingly characterised by the rise in the number of auctions, with sale by auction becoming the dominant method in some parts of the region. With over 38% of all sales in Auckland completed by auction, and more than one in five sales by auction across the country during November, we are seeing something of a change in the way both buyers and sellers are approaching the market. What we do know is that most properties that sell by auction sell for higher prices and faster than other properties. The market is responding to this. ”
REINZ data shows there were 7,454 unconditional residential sales in November, an increase of 1,446 sales (+24.1%) compared with the same time last year and an increase of 12.3% compared to October. On a seasonally adjusted basis November’s sales were 1.2% lower than October and 19.3% higher than November last year.
All regions recorded increases in sales volume compared to November last year, with Central Otago Lakes recording an increase of 45.9%, followed by Otago with 38.7% and Auckland with 28.9%. All regions, apart from Hawkes Bay, recorded increases in sales volume in November compared to October, with Otago recording a 36.6% increase followed by Manawatu/Wanganui with a 19.4% increase and Central Otago Lakes with an 18.1% increase.
The national median house price increased by $3,250 from $380,000 in October to $383,250 in November; an increase of 0.9%. Auckland’s median house price moved up 1.9% compared to October to a new record median price of $540,000. The national median house price is up 4.3% compared to November last year, while the Auckland median price is up 10.2% compared to October last year. Otago also recorded a new record median price of $258,000, up $18,000 (+7.5%) compared to October. Canterbury/Westland again reached its record median price of $345,000 last reached in August.
For the month of November, Northland recorded the highest lift in prices for the month with an increase of 10.8%, followed by Otago with 7.5%, and Hawkes Bay with 6.4%. Compared to November 2011, Auckland recorded the highest lift in prices with an increase of 10.2%, followed by Wellington with 5.7% and Central Otago Lakes with 4.9%.
New record median prices were recorded in November for New Zealand, Auckland and Otago in November, with Canterbury/Westland also hitting the record median price it last reached in August 2012.
The REINZ Stratified House Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 7.3% higher than November 2011 and is at another record high. The House Price Indices for Auckland, Christchurch and Other South Island also set new record highs in November.
Days to sell
The national median days to sell eased by one day in November compared to October, from 32 to 33 days, with the number of days to sell also improving by two days compared to November 2011. For the month of November, Canterbury/Westland and Otago recorded the shortest days to sell at 28 days, followed by Auckland and Wellington with 30 days. Northland recorded the longest number of days to sell at 58 days, followed Central Otago Lakes with 49 days and Taranaki with 46 days. Over the past 10 years the median days to sell for the month of November has averaged 33 days across New Zealand.
Nationally there were 1,539 dwellings sold by auction in November representing 20.7% of all sales, up from 909 sales in November 2011 representing 15.1% of all sales. This is a new national record for the percentage of sales by auction and beats the previous high of 20.2% reached last month. Auction sales in Auckland also reached a new record with more than 38.8% of all sales in the region in November sold by auction, or more than 1,130 sales.
Transactions in Auckland again dominated the auction market, representing 73.7% of the national total of auction sales. 38.8% of all dwelling sales in Auckland were by this method in November; this was up strongly from the 27.0% of sales by auction in November 2011. Sales by auction in Waikato/Bay Of Plenty accounted for 10.3% of the national total, Canterbury/Westland accounted for 7.7% of the national total, and all other regions combined accounted for the remaining 8.3% of auction sales in November 2012.
Across New Zealand the total value of residential sales, including sections was $3.62 billion in November, compared to $3.15 billion in October, and $2.67 billion in November 2011. For the 12 months ended November 2012 the total value of residential sales was $33.54 billion.
The breakdown of the value of properties sold in November 2012 is:
$1 million plus 390 5.2%
$600,000 to$999,999 1,251 16.8%
$400,000 to $599,999 1,893 25.4%
Under $400,000 3,920 52.6%
All Properties Sold 7,454 100.0%
REINZ Stratified Median Housing Price Index
The REINZ Housing Price Index increased 1.4% in November compared with October to sit at 3,544.4, a new record high. The REINZ Housing Price Index also recorded new record highs in Auckland, Christchurch and Other South Island. All areas, apart from Sections recorded increases in November. Compared to November 2011 the REINZ Housing Price Index rose 7.3%, Auckland rose 13.4% and Christchurch 3.8%.
(Updated with comments from Westpac's Dominick Stephens).