House sales volumes and prices fell in December last year versus both December 2009 and the previous month of November, the Real Estate Institute of New Zealand (REINZ) says, as the number of new sales listings dropped and demand softened.
In its December Residential Market Report the REINZ says the volume of sales in December fell 11.3% to 4,397 from 4,957 in December 2009 and 14.4% from 5,138 in November 2010.
The national median sale price eased back NZ$8,000 or 2.2% to NZ$352,000 in December from NZ$360,000 in November.
The national median number of days to sell dropped to 39 in December from 40 in November.
Helen O’Sullivan, the REINZ's chief executive, said the drop in sales volumes followed a fall in listings in December and in the number of houses on the market due to good November sales. For November the REINZ said a spike in listings at the beginning of the month led to a "late flush" of spring activity.
Realestate.co.nz reported that December saw the lowest recorded level of new listings since January 2007 with just 8,924 coming onto the market during the month leaving total inventory at 50.1 weeks of equivalent sales, as assessed on a seasonally adjusted basis, in December down from 53.2 weeks in November. As of December 6 there were 65,885 houses listed for sale on Trade Me and 49,300 listed on Realestate.co.nz. That compares to 63,452 and 48,406, respectively, on November 1. See interest.co.nz's chart on houses for sale here.
Meanwhile, O'Sullivan said December sales volumes were always subject to the timing and impact of "the great New Zealand Christmas shut down."
"January’s figures will provide a better picture of market activity over summer," said O'Sullivan. "Anecdotally our members are reporting increased activity so it will be interesting to see how that translates into listings and sales.”
The REINZ data comes after Quotable Value (QV) said last week nationwide residential property values were down 0.9% in December from the same time a year earlier and 5.8% below their late-2007 market peak.
QV also said New Zealand's residential property market was unlikely to be much different in 2011 than 2010 unless there were significant changes in the wider economy, with consumer confidence needing to improve before the property market picked up.
Meanwhile, Barfoot and Thompson said earlier this month it sold 524 properties in Auckland during the first three weeks of December, down 19.1% from the same period of 2009. The real estate agent said the first half of 2011 would be the best time to act for homeowners looking to sell their properties during the year.
Tax changes reduce demand
JP Morgan economist Helen Kevans said weaker demand for property saw the REINZ house price index drop 1.6% over 2010 and 0.6% in December.
"Since new tax measures were introduced (in last May's Budget) preventing property investors from offsetting their losses against income and other taxes, demand for real estate has pulled back considerably," said Kevans.
The volume of house sales in May, when the tax changes were introduced, was 5,206.
Kevans also said slow sales had kept inventory levels elevated, meaning the backlog of unsold properties sitting on the market would depress house prices further.
Read the REINZ's statement below:
December’s sales and residential property values ebbed from November levels but on a more positive note, both market activity and median prices remained up on figures from earlier in the year, according to statistics released today by the Real Estate Institute of New Zealand (REINZ).
“December’s residential property sales volumes flagged a little relative to November,” says REINZ Chief Executive Helen O’Sullivan.
“But while volumes have ebbed, December’s sales were higher than in the months of August to October of the same year. That’s relatively rare, as December volumes are usually lower than even the winter months, and bodes well for activity levels in the new year.”
“The decline in turnover has followed a fall in listings in December and in the number of houses on the market as a result of good sales in November,” says Helen O’Sullivan. “December sales volumes are always subject to the timing and impact of the great New Zealand Christmas shut down and January’s figures will provide a better picture of market activity over summer. Anecdotally our members are reporting increased activity so it will be interesting to see how that translates into listings and sales.”
The most up to the minute statistics on recent property value movements across New Zealand, the REINZ report on sales in December indicates district median prices at the end of the year were an average of 2.2 per cent down on December 2009. From $360,000 in November 2010 and in December 2009, the national median eased back to $352,000 in December 2010, still higher than the median prices in July, August, September and October.
Total dwelling sales fell back to 4,397 in December from 5,138 in November, which is also down on the December 2009 total of 4,957. But last month’s dwelling sales median is up on the August, September and October medians and the volume of 4,397 was higher than the 4,302 transactions in December 2008. The national median ‘days to sell’ reduced slightly from 40 in November to 39 in December.
Nationally the total value of residential sales, including sections, fell to $1.9 Billion in December from $2.26 Billion in November. The breakdown of the values of the properties sold is 154 for $1 million plus, 517 between $600,000 and $999,999, 1,106 between $400,000 and $599,999 and 2,620 for under $400,000.
Wellington’s median last month held steady at the December 2009 median price of $400,000 and sales were up from 548 in December 2009 to 586 in 2010. Southland’s December 2010 median is also the same as 12 months ago at $184,000 while Otago’s median price of $235,000 was up 2.17 per cent on the previous year. In all other districts the December 2010 median price is down between 1.5 and 7.5 percent on the same month in 2009 and most districts also reported a fall in sales volumes.
(Updates add further detail, background and Helen Kevans' comments).