The number of nationwide house sales slumped to a new monthly low in January, with new listings and prices dropping and the average days need to sell a house jumping by eight.
The Real Estate Institute of New Zealand (REINZ) said there were just 3,252 sales in January, down from 3,666 in January 2010, the previous monthly low since REINZ records began in
October 1996. January 1992.
Meanwhile, the number of new house listings coming on the market also hit a new low over the month.
The REINZ said the national median price fell by NZ$12,000 in January from December and is 2.9% down year-on-year.
The median house sale price in January was NZ$340,000 - down from NZ$352,000 in December and NZ$350,000 in January 2010.
From 39 in December, the national median for days to sell rose to 51 in January, 8 more days than in January 2010.
The REINZ figures come after Realestate.co.nz reported on February 1 that new housing listings fell nationally to a record low 8,300 in January and were down 19% from a year ago as the average asking price fell 2% in the month to NZ$406,525.
Releasing the December sales figures last month, which showed the volume of sales down 11.3% year-on-year to 4,397 and the national median sale price down 2.2% from November, REINZ chief executive Helen 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," O'Sullivan said last month. "Anecdotally our members are reporting increased activity so it will be interesting to see how that translates into listings and sales.”
See the release from the REINZ below and click here to see the market statistics
Activity remained muted in the residential property market in January and the number of sales fell below the record low set in January of last year, in the latest statistics released today by the Real Estate Institute of New Zealand (REINZ).
“The traditionally subdued month of January was marked by the lowest ever level of new listings coming to market and turnover fell to a new low below that of January 2010,” says REINZ Chief Executive Helen O’Sullivan. “This reflects that with rental shortages in key urban areas such as Auckland and relatively low interest rates, home owners and investors alike are under no pressure to sell.”
“Good income prospects bode well for better returns on rental investments,” Helen O’Sullivan says, “But low levels of building consents don’t suggest any significant increase in new housing stock in the short term. This in turn should provide support for prices over the coming 12 months, and perhaps an opportunity for would-be investors”.
The most up to the minute statistics on movements in property prices across New Zealand, the REINZ report on sales in January shows the national median price is 2.9% down on a year ago, but still 4.6% above the 2009 figure. From $352,000 in December 2010 the national median decreased to $340,000 in January and is $10,000 below the January 2010 median of $350,000 but higher than the January 2009 median of $325,000.
From 4,397 in December 2010, the number of residential property sales declined to 3,252 in January, below the previous low of 3,666 sales recorded in January 2010.
Nationally the total value of residential sales, including sections, fell to $1.3 Billion in January from $1.9 Billion in December. The breakdown of the values of the properties sold is 73 for $1 million plus, 365 between $600,000 and $999,999, 786 between $400,000 and $599,999 and 2,028 for under $400,000.
In Northland the median price increased 2.27 per cent on the same month in 2010 and in the Auckland District is just $500 lower, or less than 1 per cent down on twelve months ago. In all other districts it decreased between 1 per cent in Southland and 17 per cent in Otago on the same month in 2010, and sales are also down in all districts when compared to January 2010.
From 39 in December, the national median for days to sell rose to 51 in January, 8 more days than in January 2010. Sales were fastest in Auckland at 41 median days and slowest in Northland where the median days to sell was 96.
Here is ASB economist Chris Tennant-Brown's take on the figures:
The housing market is typically quiet over December and January, which makes interpreting data slightly more difficult. However, the data were very weak even when the seasonal impact is taken into account. Turnover weakened further in between December and January, dropping 8% in seasonally-adjusted terms. October 2010 was actually a weaker month for turnover when the seasonal drop off in January activity is taken into account. However, the fact that the unadjusted monthly turnover was the weakest monthly turnover on record will certainly grab some headlines.
2009 was a year of recovery for the housing market. Prices rose 6.9% between January 2009 and January 2010. However, over 2010 the housing market stagnated. Prices dipped 1.6% over 2010, and January data show prices are down around 6% on the peak recorded in late 2007.
The low number of new listings shown in realestate.co.nz report released earlier in the month provides some comfort. Low listings will help to contain the overhang of houses on the market during this period of low sales turnover. However, based on the turnover in today’s REINZ report, the amount of inventory relative to turnover extended from 11.7 to 12 months. This measure, combined with the long number of days to sell continues to indicate the market remains tipped in favour of buyers, and suggests prices will be soft over the coming months.
We expect the caution shown by households in late 2010 will continue this year. We expect turnover to remain low over the coming months, and prices to remain soft, down around 5-6% on the 2007 peak.
Overall the January REINZ data was weak, but our disappointment is tempered slightly by the fact that housing data for January is heavily impacted by the holiday season. However, the data were weaker than our low expectations, and this does not bode well for activity as we now enter the busier months for the housing market. The weakness in the housing market, and the lack of traction low interest rates are having on the broader economy at present reinforces the need to keep interest rates low for the foreseeable future. We expect the RBNZ will not lift rates again until September and that the early stages of the tightening cycle will be very gradual.
(Updates with ASB comment)