REINZ saw strong March sales

Property

REINZ reports sales volumes up 5.4% seasonally adjusted in March; Auckland sales up sharply; rest of NZ more subdued; Your experience?

13th Apr 11, 10:27am by Bernard Hickey

By Bernard Hickey

The Real Estate Institute of New Zealand (REINZ) has reported a strong lift in property sales volumes in March, mostly in Auckland.

REINZ reported 5,848 property sales in March, which was up 29.9% in raw terms from February and up 32.2% once Canterbury/Westland figures are excluded. Sales rose 5.4% from February in seasonally adjusted terms and once Canterbury/Westland are excluded from both totals. Volumes were up 1.5% in March from a year ago once Canterbury/Westland is excluded, but down 5% without the earthquake affected areas excluded.

The national median sale price rose to a record high NZ$365,000 in March from NZ$350,000 in February and is above the NZ$360,500 seen in March last year.

However, the REINZ stratified median house price index, which strips out the impact on the median of skew from more expensive houses selling, found prices up 0.5% in March from February and up 0.3% over the last three months. The index remains 5.1% below its peak and down 1.8% from a year ago. It also fell 0.3% on a seasonally adjusted basis in March, ASB said.

Section prices are down 16.4% from the peak using the stratified index.

Volume and price growth was strongest in March in the Auckland market. Sales in Auckland of 2,437 in March rose 53.2% from 1,591 in February and rose 11.4% from 2,187 in March 2010. Sales were highest in any March since 2007 and the highest in any one month since July 2007.

“The March results show real growth in volumes in the Auckland market,” said REINZ Chief Executive Helen O’Sullivan.

“Volume growth across the rest of the country, while impressive compared with February, is more in line with seasonal trends. We are also seeing that while volumes have strengthened, prices are only showing modest changes across the country. Buyers are increasingly seeing price stability, which is giving them confidence to enter the market.”

REINZ said on a seasonally adjusted basis Auckland’s volumes rose 10.5% from February. REINZ said 17.7% of the NZ$2.62 billion worth of houses sold in March were in the price bracket over NZ$600,000.

The REINZ figures reflect the strong growth reported earlier this week by Barfoot and Thompson, which is Auckland's largest real estate agency group. See our earlier article on Barfoots figures for more details.

“The strong growth in Auckland has been driven by a number of factors including a persistent shortage of housing stock, continued weak building consents, resulting rental pressure and low interest rates. There were also some pockets of strength outside of Auckland, with Tauranga, Mt Maunganui/Papamoa, Hutt Valley and Timaru all showing both median house price and volume growth," O’Sullivan said.

However, the REINZ figures conflict somewhat with those released on Tuesday from Quotable Value, which suggested activity and prices had been more subdued. See our article here on QV figures for more detail.

REINZ reports raw sales volumes and prices in any one month, while QV reports movements in 'like for like' values on a rolling three month period.

Nationally, the median 'days to sell’ (measuring the number of days from listing date to unconditional date) fell from 58 days in February 2011 to 41 days in March 2011, but was up from 35 days in March 2010.

Auckland recorded the shortest days to sell at 35 days, with Southland was next shortest at 36 days. Across the country all regions other than Nelson/Marlborough recorded a decrease in days to sell. Northland remained the region with the longest number of days to sell at 94 days. This was 17 days fewer than the February 2011 measure of 111 days.

Christchurch volume down

Days to sell in Canterbury/Westland also recorded an improvement between February 2011 and March 2011, falling from 57 to 50 days.

REINZ said volumes in Christchurch City had fallen dramatically in March 2011 compared to February and March 2010. The earthquake hit on February 22. See our article here on Harcourts figures for more detail.

"What is remarkable is that despite a number of conditions becoming essential to transactions, including insurance, there were 193 unconditional sales in Christchurch in March," REINZ said. This compares with 244 in February 2011 and 595 in March 2010.

REINZ said analysis of the detail for Christchurch showed there was activity in certain areas whilst other areas showed little or no movement. The median house price in Christchurch was NZ$320,000 for March, down NZ$5,000 from February and unchanged from a year ago.

See my commentary here in video form:

Here's ASB Economist Chris Tennent-Brown reaction:

·         Nationwide turnover picked up a seasonally-adjusted 4.5% from February. Stripping out the Canterbury region, nationwide turnover recorded a seasonally-adjusted 6.8% lift.
·         The Canterbury earthquake continues to disrupt activity, with seasonally-adjusted turnover in the Canterbury Westland region dropping 4%.

·         Days to sell shortened to a seasonally adjusted average of 45 days (from 48 in February).

·         Nationwide prices continue to track sideways according to the Stratified Median House Price Index, which eased 0.3% in the month (seasonally adjusted), to be up 0.1% on a year ago
March was a reasonable month for nationwide housing activity according to the REINZ housing report. A pick up in activity was expected, given the strong lift in turnover observed in Auckland data from Barfoot and Thompson, as well as a lift in nationwide mortgage approvals recorded by the RBNZ.
As well as a 4.5% pick up in turnover, average days to sell shortened from 48 days to 45 days (seasonally adjusted). However, by this measure buyers are still in no rush at present. Days to sell have averaged 38 days since the series begain in 1992.

The lift in nationwide turnover was driven by a strong pick up in Auckland activity. Auckland turnover picked up 53% from February (unadjusted), and the region’s turnover accounted for unusually high 42% of nationwide activity. Auckland also recorded the shortest number of days to sell.

As well as Auckland, REINZ notes pockets of strenght in parts of the Bay of Plenty, Upper Hutt and Timaru.

The Canterbury earthquake is disrupting activity in the region.   As well as the damage and disruption from the earthquake itself, insurance difficulties have held up sales. Despite the challenges, unconditional sales were still recorded in Christchurch city, with 193 sales taking place in March 2011. However, this compares to 595 sales in March 2010.

REINZ’s stratified median house price index is our preferred measure of prices. The index eased 0.3% in the month (when seasonally adjusted), to be up 0.1% on a year ago. Prices in Auckland are up 1.8% on a year ago, and Christchurch prices are up 3.1% on year ago levels, whilst prices in other parts of the country are down.

A separate report from Realestate.co.nz shows that the inventory of properties on the market has been reasonably contained over recent months. The amount of inventory relative to turnover still suggests that the market is tipped in favour of buyers, but the seasonally-adjusted inventory level has been declining for four consecutive months. The ratio of turnover to inventory (ex Canterbury) has been improving from the peak of 14.5 months of inventory to 10.1 for March. This ratio has ranged between 4.4 in the boom of 2007 when records began, through to 14.6 in November 2008.

Implications

A contained level of inventory, positive migration and population growth, as well as the recent drop in interest rates are all positive for the property market over the year ahead. We expect nationwide prices are troughing out now, and should increase by around 3% over the year ahead.

Behind this lift will be a range of experiences, from stronger price appreciation in areas such as Auckland, and ongoing weakness in areas where population and income growth are less supportive. In Christchurch we expect strong demand for properties which have not been damaged which should be supportive of prices in the region.

Here is a regional breakdown from REINZ.

Northland

The median house price for Northland rose between February 2011 and March 2011 furthering the gains recorded between January 2011 and February 2011. Volumes grew solidly in March 2011 compared to February 2011, particularly for Whangarei City, but volumes remain weak compared with March 2010.

The strong volumes may be a result of investors returning to the market and agent feedback indicates that there is renewed interest in $750,000+ properties; a part of the market that has been very quiet for some time. Northland’s days to sell fell to 94 days from 111 days in February 2011, which was a record for the region. Days to sell remains 12 days longer than the 82 days recorded for March 2010.

Auckland

The pricing picture in the Auckland region remains mixed with rises in one part of the city being offset by falls in others, leading to no clear trend across the region. Auckland City’s median price rose 5.1% compared to February 2011, but were 5.5% lower compared to March 2010. Manukau City prices showed the reverse trend, while only Waitakere City recorded gains in March 2011 compared to both February 2011 and March 2010.

The Auckland region was the strongest market in volume terms by some margin with all parts of the region recording stronger volume growth than the national results compared to both February 2011 and March 2010. Of particular note is the volume growth in Auckland City and continued strong volume growth in North Shore City.

Auckland’s days to sell at 35 days were the shortest across the country, falling from 50 days in February 2010 and only one day longer than March 2010. Auckland’s March 2011 days to sell is similar to results recorded for the month of March over the past few years.

Waikato/Bay of Plenty/Gisborne

Prices once again fell across the Waikato/Bay of Plenty region during March compared to both February 2011 and March 2010, although there was noticeable price strength in Tauranga and Mount Maunganui/Papamoa on relatively strong volume growth.

Across the region, volumes were up solidly, but less than the national result, although Hamilton City, Tauranga, Mount Maunganui/Papamoa, and notably Rotorua volumes all performed better than the national result compared to February 2011.

The median days to sell fell to 64 days across the region, compared to 79 days in February 2011 and 48 days in March 2010. The number of days to sell is the same as in March 2009.

Hawkes Bay

After recording solid rise in the median house price in February 2011 the result for Napier fell almost 10% in March 2011, although Hastings recorded a weaker result than Napier. Across the region house prices fell noticeably compared to February 2011, although more modestly compared to March 2010.

Volumes were weaker across the region than the national result compared to February 2011, but slightly stronger than the national result compared to March 2010. Overall a very mixed bag for the Hawkes Bay region.

The median days to sell was 52 days for March 2011 compared to 60 days in February 2011 and 42 days in March 2010. While the days to sell result was an eight day improvement this was less than the national result, which saw a 17 day improvement.

Manawatu/Wanganui

The Manawatu/Wanganui region recorded a relatively weak result for March 2011, with falling prices and very modest volume growth compared to February 2011. The strong seasonal lift normally occurring in March does not appear to have extended to this region, this year.

The median days to sell fell to 49 days in March 2011 compared to 65 days in February 2011 and 47 days in March 2010.

Taranaki

The median house price rose strongly in Taranaki Country between February 2011 and March 2011, however, this comes after a noticeable fall between January 2011 and February 2011. Because of the small dataset the medians for this suburb need to be treated with some caution. Across the rest of the region prices were weak compared to both February 2011 and March 2010.

Volumes across the region were also weak with New Plymouth City the only stand out, with volume growth above the national result between February 2011 and March 2011. There appears to be increasing buyer interest in lower priced properties with investment buyers starting to emerge across the region looking to expand their portfolios.

The median days to sell in Taranaki fell to 49 days in March 2011, compared to 64 days in February 2011 and 49 days in March 2010.

Wellington

The median house price for the Wellington region increased only 1.6% in March 2011 after a strong 10.4% increase in February 2011. Compared to March 2010 the region recorded a median price increase of 1.5%. Across the region the results were mixed, although pricing strength was seen in the Hutt Valley and Eastern Wellington.

Volumes across the region were up slightly less than the national result. The stand out suburb was Western Wellington where there was a near doubling of volumes in March 2011 compared to February 2011; however, the volumes for the suburb were flat compared to March 2010.

The Wellington region’s median days to sell fell from 49 days in February 2011 to 37 days in March 2011, but this was 8 days longer than the 29 days recorded in March 2010. For the month of March the Wellington region recorded the third shortest days to sell after Auckland and Southland regions.

Nelson/Marlborough

The median house price saw only a $2,000 drop in March 2011 compared to February 2011. Richmond recorded a sizeable drop in the median price, but caution is required due to the low volumes recorded in the suburb. Median prices were also down modestly across the region compared to March 2010.

Nelson/Marlborough was the only region other than Auckland to record a stronger lift in volumes compared to the national result, with Nelson City leading the way with a 48% lift in volumes compared to February 2011. However, compared to March 2010, volumes across the region were weaker than the national result.

In a reversal of last months result, the days to sell for the region increased whereas as the days to sell for all other regions fell, with March 2011 recording 56 days compared to 48 days in February 2011 and 37 days in March 2010.

Canterbury/Westland

The continuing impact of the February 22 earthquake can be seen in the volume results for Christchurch City with the number of sales down 21% compared to February 2011 and 68% compared to March 2010, although it is noticeable that median prices have remained relatively stable. This situation is likely to persist for some time as the city emerges from the effects of the earthquake and the rebuilding begins.

Elsewhere in the region the housing markets appear to have returned to normal with volumes across the region rising 8.4% compared to February 2011, after taking into account the fall in Christchurch City and volumes being up 2.9% compared to March 2010 excluding Christchurch City.

Volumes in Timaru have shot up, although there has only been a modest impact on prices thus far.

Despite the devastation of the earthquake the days to sell for Canterbury/Westland have fall from 57 days in February 2011 to 50 days in March 2011, although both these results are significantly higher than the 29 days recorded in March 2010. This data must also be treated with caution as a number of listings have of course been withdrawn from the market.

Central Otago Lakes

The median house price rose noticeably between February 2011 and March 2011 in Central, although the median price in Queenstown fell by 10%. Volumes in March 2011 showed no noticeable change compared to either February 2011 or March 2010.

The median days to sell for the Central Otago Lakes region fell from 67 days in February 2011 to 60 in March 2011, which is 10 days shorter than the 70 days recorded for March 2010.

Otago

The median house price for Dunedin and the Otago region fell during March, after rising in February 2011. Prices were also noticeably weaker compared to March 2010. After a strong showing with volumes in February the result for March was comparatively weak, with very little change in volumes in Dunedin City.

The median days to sell 50 days in March 2011 compared to 57 days in February 2011. The median days to sell in March 2010 was 29 days.

Southland

Median house prices fell noticeably across the region. Care needs to be taken with the Gore result due to the low number of sales and then fact that volumes are significantly lower in Gore compared to both February 2011 and March 2010.

The median days to sell for March 2011 was 36 days, an improvement on the 52 days recorded for February 2011. This was the second shortest number of days to sell across New Zealand for the month of March. The median days to sell was 34 days for March 2010.

(Updated with detail from release, background, links to previous articles, interactive chart below, ASB economist's reaction, REINZ regional breakdown, Bernard Hickey's video commentary; Double Shot interview with REINZ CEO Helen O'Sullivan)

Volumes sold - REINZ

Select chart tabs

Source: REINZ

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92 Comments

by Bernard Hickey | 13th Apr 11, 11:11am 1302649903

This is what happened to the tax cut for those on higher incomes. They borrowed more and bought more expensive houses in Auckland.

Is this what the tax package was supposed to do?

cheers

Bernard

by DMode | 13th Apr 11, 11:26am 1302650764

That's exactly what has happened with us and friends, the tax cuts allowed us to get a house at the next level.

I'm don't know if it was the primary intention of the tax cuts, but I'm sure there are plenty of National supporters holding housing stock who appreciate the move

by rc | 13th Apr 11, 11:28am 1302650880

Nothing at all to do with the current low interest rates eh

Or could it just be the "dead cat bounce"

by DMode | 13th Apr 11, 11:36am 1302651397

And low interest rates are good too, but any significant move will be compensated for by the cuts

I think the surge is just a blip, a clearing out of those who have been waiting

by Vera Fayed | 13th Apr 11, 12:49pm 1302655785

"Or could it just be the "dead cat bounce"

Don't think it counts as a bounce when the cat sprouts wings and flies off to alight on a lofty peak looking down at all the peasants still strutting around wearing sandwich boards predicting 30% price falls.

by keriwin | 13th Apr 11, 12:00pm 1302652814

Why do you keep going on about low interest rates, look at the rest of the world, 25 year mortgage in USA at less than 4% etc.

by Vera Fayed | 13th Apr 11, 12:37pm 1302655032

So...let's see if I've got this right Burnhard. When Labour raised tax to 39c everyone went out and bought property to save tax, causing prices to rise. And now the Nats have lowered tax to 30c everyone has rushed out and bought property with their tax savings, causing prices to rise. Hmmmm, interesting.

by David B | 13th Apr 11, 5:30pm 1302672638

This is what happened to the tax cut for those on higher incomes. They borrowed more and bought more expensive houses in Auckland.

Is this what the tax package was supposed to do?

A. Bullshit.

B. Prove it.

by Gloom | 13th Apr 11, 7:11pm 1302678710

BK There is nothing to do with TAX cut. It was low interest rate boosting market.

by Matt in Auck | 13th Apr 11, 7:29pm 1302679774

exactly! We saw a similar mini boost to the market early last year after the big drops in interest rates. There are also seasonal factors at play, March is always one of the "high" months

I earn 120K, a "high income earner", most of my tax cut has been eaten up by increased cost of living in the last 6 months. IMHO the tax cuts have had minimal if any impact on bolstering the housing market, but the drop in interest rates HAVE had a significant effect

by Your Landlord | 13th Apr 11, 10:51pm 1302691868

Matt, if increases in the cost of living eat up most of your tax cuts when you are on 120k then your problem is a money management issue.

Certainly, the tax cuts should enable you to purchase well given your income.

by Keyser Söze | 13th Apr 11, 11:18am 1302650280

You love to stir!

by Bernard Hickey | 13th Apr 11, 11:32am 1302651171

Keyser

And I love it that you love to bite... ;)

cheers

Bernard

by Vera Fayed | 13th Apr 11, 12:41pm 1302655276

"And I love it that you love to bite... ;)"

Please keep your fetishes off the MB ,BH. Sometimes my kids read this board. Maybe you and Keyser should get a room....

by kpnuts | 13th Apr 11, 11:25am 1302650700

Probably ! given that march coincided with the rate cuts, an expectation that many Cantabs would relocate to Auckland, a pressured rental market and given virtually no new builds / housing in the last three years, perhaps many people out there decided that this was the optimum time to either buy back into the market or trade up.

Certainly its hard to see either floating or fixed rates declining any further so all the risk is on the upside at moment - and hard to see how the housing shortage in Auckland, giving internal and external migrational factors is going to alleviate with so few housing consents in the last 18 months

Cant see this is a sustainable recovery adn a return to pre 2008 sales figures, more a short splurge as many people who have been sitting on their hands waiting all decided the conditions were as good as they will get for the foreseeable future.

Remember when the banks all offered 5.95% fixes for five years - lasted about 6 weeks before masses of people correctly took the rate - and were proved right - and then they jumped about 2% in three months

cheers

by Billy | 13th Apr 11, 11:30am 1302651014

This is confusing isn't it. REINZ and QV are seeing different signals and figures.

by Paul Bettany | 13th Apr 11, 11:42am 1302651768

Took the extra few dollars a week and bought a million dollar house in Auckland!

Nothing to do with rising demand for housing from Rental /Buying market from increased demand.

No houses getting built as far too expensive to build.Immigtrants from overseas and Chch moving to rent/buy in Auckland.

Bollard finally waking up to last years mistake and dropping rates.

Worm has turned in the Property market and the doomsday seers will miss the train!

haha

Buyers who have been waiting and waiting for house prices to fall will now chase the market and get stung.Renters will be hard pushed to find a home as law changes and lack of attraction to investment housing market means prices going north at a rate of knotts.

B I think you got your call on Housing totally wrong!Demand and Supply stupid

by steven | 13th Apr 11, 11:56am 1302652582

Lemming....

regards

by dosser | 13th Apr 11, 11:45am 1302651900

Billy - look at the REINZ news release. Prices are significantly weaker across most of the country on a year-on-year basis.

https://www.reinz.co.nz/shadomx/apps/fms/fmsdownload.cfm?file_uuid=F33D…

Mr Tennent-Brown's analysis defies logic.

by Bernard Hickey | 13th Apr 11, 12:01pm 1302652860

FYI updated with regional detail from REINZ. Essentially, Auckland luxury-high end property going gangbusters. The rest of the country is flat on its back.

cheers

Bernard

by Snarlypuss | 13th Apr 11, 12:29pm 1302654589

"Why It's A Terrible Time To Buy An Expensive House" And this in a market that's already had a substantial fall! "...The only true sign of a bottom is a price low enough so that you could rent out the house and make a profit."

by JimboJones | 13th Apr 11, 2:26pm 1302661592

The real reason prices went down so much in the US is that they have too much supply - not a factor here.

If you buy a house without a mortgage and rent it you will of course make a profit. Even if you only end up with 3% after tax and expenses that is probably still better than money in the bank (after tax and inflation) or any other form of relatively safe investment. People that say you can't make money out of rentals are not doing their sums right and not factoring in inflation properly.

by Kermit The Frog | 13th Apr 11, 2:40pm 1302662400

Different country, different drivers.

by speckles | 14th Apr 11, 7:06pm 1302764761

Because they are over priced and that is why I just sold my Auckland property, too tempting with the foex rate up time to move offshore b4 the Budget and its consequences.

by stp | 13th Apr 11, 12:23pm 1302654222

RMS Titanic...?!

by Champagne Charlie | 13th Apr 11, 12:30pm 1302654645

haw haw .... prices in Aucks are on the rise again

Great news ol' boy for my banking shares, that's the way PI's and house buyers ..... send as much of the filthy luka my way, in the form of those lovely mortgage interest repayments... oh true bliss it is when my bank share dividends and share prices are on the increase ..damn fine in fact.

Doesn't matter if the returns are dire on your investment.... it is the return on my investment that matters ... haw haw

Streams of income coming my way ... that's the way chaps

My good friends at REINZ really know how to "pump up" the market .... a fine display of publc relations if ever I saw them

sent from my iphone4 - from my ocean view suite at the Royal Hawaiian, Waikiki .....cocktail in hand of course ! haw haw

by Bernard Hickey | 13th Apr 11, 12:31pm 1302654660

This from a reader via email, which is very useful.

"Just read your piece about the REINZ figures… "The main reason why the REINZ figures and the QV figures are different is that they each have a different measurement base. REINZ figures are for properties that went unconditional during the month of March. The monthly data is for that month only. "QV figures are based on settlements and are pulled from local council data, so their figures will generally reflect what was going on back in Feb and in some cases January. Also the QV figures are based on the previous three months – so settlements in Jan/Feb/march in included in the March result, so conceivably include properties that REINZ were reporting on as far back as November. "So in that sense QV data should lag REINZ data by between 1 and two months. I haven't done a data analysis to look at the comparability between the two sets, but imagine that if one lags the QV data to the REINZ data the R2 should rise and the standard error should drop."

by hamrod | 14th Apr 11, 9:34am 1302730448

I would say the comment "REINZ figures are for properties that went unconditional during the month of March" isn't exactly accurate. Not all the REINZ sales will settle. There will always be a percentage that sign up and then pull out for whatever reason. And then those buyers will probably go and buy another house, further adding to the REINZ stats.

The QV stats are based on settled sales data, which is why they lag behind, however its a more accurate view of the market than REINZ. Cheaper houses tend to settle faster and more expensive ones tend to have a longer settlement period which is why they cant take accurate medians from the most recent month and need to use a three month median.

To all the people raving on about the last months data.. get a life. Look at the graph, volumes and median sale prices have been up and down every month since 2008.. but the trend has been flat the whole time.

by JimboJones | 13th Apr 11, 12:32pm 1302654741

I can see quite a few positives for the Auckland market:

- The predicted price drops haven't really happened even during the recession, people are starting to believe they won't happen.

- Interest rates are only going to go up from here, so get in now and fix.

- A lot of the fear of high debt from the credit crunch has worn off.

- More money in pockets from tax cuts.

- Demand from ChCh

- Supply down due to nothing being built and no land to build on

I guess the only real negative is that prices are already so high, are any further increases just adding air to the bubble. I guess it is the risk some people are prepared to take.

by Matt S | 13th Apr 11, 12:45pm 1302655500

What a f'd up world we live in where there is a whole industry as well as a large number of individuals that think that the rising cost of basic nessecities (in this case shelter) is a good thing. Presumably for these people, we'd also all be better off if the prices of food, energy and transportation also rose beyond the means of the average kiwi !!

by JimboJones | 13th Apr 11, 1:00pm 1302656437

I'm sure the people that grow food like it when food prices go up just like the people that own houses like it when house prices go up. Do you prefer it when the things you own go down in value?

by Snarlypuss | 13th Apr 11, 1:06pm 1302656764

People who want to buy a better house love it when the price of property falls! It costs them less to 'upgrade'. ( NB: Price and Value are different things.)

by IndianKiwi | 13th Apr 11, 6:20pm 1302675648

"People who want to buy a better house love it when the price of property falls! It costs them less to 'upgrade'. "

For those who want to upgrade it won't make much difference, since their own property would fall too

by Matt in Auck | 13th Apr 11, 8:06pm 1302681991

Matt S - It's really symptomatic of how f##$ed up NZ is that's for sure. Our economy has so little depth that we pathetically rely on house prices to keep us going - just. And our leaders realise that, so despite their rhetoric about wanting to deal to the house price problem, they won't do anything meaningful because they know our economy will collapse the moment housing collapses.

There is no future in that, and we will continue to see our standard of living slip away. Of course PIs are generally self-interested people so don't give a damn about the wider national interest. The problem with this is that its all very karmic - the more house prices get stoked up again, the more likely we will see a BIG collapse in prices

by 28_29 yr old | 13th Apr 11, 12:49pm 1302655776

Record $365000 wow!

Can we have that chart up please, I would like to see that graph :)

Auckland: Up a bit down a bit up a bit....up a bit more?

by Colin Riden | 13th Apr 11, 10:24pm 1302690278

Before you get too carried away with the the REINZ median you might want to look at the stratfied data. If you did you would find that the top four strata (out of ten) made up just over 50% of the sales in March. That means the median house price is now for the first time in decile seven.

Meanwhile back in deciles 1-5, stratified median prices dropped an average $4,000 while average prices dropped close to 3%. Deciles 6-9 as a group were slightly down on average price but the medians were up an average of $4,000.

All of which leaves decile ten houses making up 14.5% of sales at an average price of $827,000 being nearly 10% higher than in February and with the median price up $19,000.

Those figures are national figures. Great if you are selling a decile ten house especially in Auckland, but not so if your house is in deciles 1-5.

by Mark | 13th Apr 11, 12:55pm 1302656110

We sure do love our (and everyone else's) property here in NZ!

by Your Landlord | 13th Apr 11, 12:57pm 1302656220

Most interesting to me is the number of days to sell, on average.

It's a figure wrought with inconsistency but at 35 days in Auckland it is low enough to be another sign of a strengthening market.

by Your Landlord | 13th Apr 11, 1:10pm 1302657000

Where's Nick A? He's normally crawling all over these property reports?

by Nicholas Arrand | 13th Apr 11, 1:28pm 1302658116

Nice to be missed, Your Landlord! But I'll concede there are times when a 3 bedroom apartment is less than ideal when emmigrants do a layover ex-Chrisrtchurch on their way to Aussie. Two out this morn to Melbourne on Jetstar @7.00am and the last one out to Sydney on Friday. So I've been 'otherwise engaged'. But in a nut shell : I'm almost besides myself with excitiment, at this weeks releases! The imaptient and the stop-profit buyers appears to be participating in the mareket ( as they always do in any asset market). That's less buyers left to support the bottom on the impending way down; less to stop a more dramatic fall. As we always used to say " There's always a spike up, before the Big Chuck"!

by Your Landlord | 13th Apr 11, 2:00pm 1302660042

Well Nick, re your guest problems, renters often have to put up with circumstances not to their liking because they can't do anything to the property. It's just one of the disadvantages.

But things look even bleaker for renters after this week. I've noted the following, from various sources:

-rising rents

-rising house prices

-the number of mortgages issued by banks increasing

-property managers telling me they have few vacancies

-falling "days to sell" in Auckland

-PIs starting to look around again at possible purchases.

That's a lot of indicators that need to turn around before the "big chuck"

Is that a bell I can still hear ringing?

by IndianKiwi | 13th Apr 11, 6:24pm 1302675867

So in your opinion, the fact that everyday rise in household prices (petrol, milk amd grocieries) and declining productivity/GDP is not going to any effect on the rental or house prices?

Why do you choose to ignore the above two essential factors?

I don't think HP would go 30% down like I used to, but nor do I think they would rise up in the way they did during the 2000-2007 period. It is going to remain flat.

by Your Landlord | 13th Apr 11, 11:03pm 1302692633

Hello IndianKiwi. Those factors are certainly relevant to people's economic situation.

If they are a sign of general inflation house prices and rents will respond as well.

I agree with you that house prices will not rise as per 2002-2007 in the near future. Some years from now they will.

For the time being it's flat, as you say, but perhaps some slow rises over the next 1-2 years.

I think rents will come under more immediate upwards pressure .

Regards.

by 28_29 yr old | 13th Apr 11, 1:28pm 1302658139

Him and ex-agent probably out Auckland house hunting

by Gavin Jones | 13th Apr 11, 1:13pm 1302657203

Prices in the Regions traditionally lag two to three years behind Auckland both ways. Auckland is moving and unlikly to decline, the Regions will follow in a couple of years. Where are the bargins currently, in the Regions of course as nobody currently wants to buy there as they continually fail to learn from history.

by bob | 13th Apr 11, 1:29pm 1302658154

If only I had followed all of Bernard Hickeys advice in 2007. I could now have no assets and be paying $800 a week in rent - instead I have assets and pay $400 a week in mortgage repayments.

Dammit - why do we never learn?

by Nicholas Arrand | 13th Apr 11, 1:41pm 1302658884

So thats $400 pw P&I? If it's just Interest, then that's probably a $400k house, 85% LVR. I doubt that rents for $800 pw. But then again I don't know the value of the property! Maybe you have a $1m house. That sounds about right for $800 pw. and that's equity of $640k ( $1m -$360k from the 400pw. interest @ 6.2%) and that equity has an implied value of about $500 pw. ( @5% on deposit, less RWT 20%) So you'd still be better off if you'd sold in 2007 and are now renting!

by bob | 13th Apr 11, 1:43pm 1302659015

Don't forget that I bought at the "peak" so there's also 6 figure capital gain to include in your figures.

by bob | 13th Apr 11, 1:45pm 1302659150

... also don't forget the advice of the time about where to invest (and it wasn't the bank).

by Gloom | 14th Apr 11, 7:34am 1302723296

I did follow BH's advise and sold my house in sentral Auckland. Now I am renting $500.00/w.

Bob, it did mean I did aometning wrong, it is just mean the house price drop hasn't finilised.

by powerdownkiwi | 14th Apr 11, 9:08am 1302728928

Gloom - how much do you pay your sentry?

by jimmy squirrell | 13th Apr 11, 1:39pm 1302658788

2 words - lower rates

... and now some more. Its one month for pete's sake. Potentialy some Christchurch migrants and lower interest rates is skewing the figures. I guess this could run for a couple of months but rates will be rasied again soon. ask yourself this, if property in Auckland starts rising fast again, do you think Bollard will sit on his hands and not raise when he has another 3-4% up his sleeves for this interest rate cycle. What I find encouraging about NZ (and NOT Australia where I live currently) is that most (pollies, economists, and now man on the street) acknowledge how high house prices have damaged the economy. Its not going to be allowed to happen again. So dont get your hopes up Bulls. Significant gains will be leant on by govt and RBA alike. not as hard as I woudl like it, but hard enough to stop major gains.

by Chris_J | 13th Apr 11, 2:00pm 1302660020

Bernard, perhaps you should ask Harcourts what they mean by "written sales" (of which they said they had 340 in March and "settled sales" (of which they claimed 228).

Of course REINZ says there were 193 confirmed sales in March. Not quite the picture Harcourts were printing.

Of course what Harcourts didn't say was that they were quoting Canterbury sales, not ChCh sales as they'd have you believe.

What would be interesting to get from Harcourts would be the number of confirmed sales in ChCh in March compared with last March, then you might see business is not so rosy.

by John | 13th Apr 11, 3:24pm 1302665067

Must be the "innovative marketing techniques being applied at present by Harcourts leading to multiple bids on properties".

So innovative that I must have missed it as all I noticed was the sign on the gate and the trade me listing.

by Chris_J | 13th Apr 11, 2:34pm 1302662087

Some figures from REINZ March:

Sales in the worst affected ChCh suburbs (Central, northeast, east, southeast, south inner, seaside north and south, all hills):

March 2009 242

March 2010 196

March 2011 27

Sales down 88% on average of previous 2 March results.

Moderately affeccted areas (south outer, southwest inner, north inner, northwest inner):

March 2009 218

March 2010 168

March 2011 68

Sales down 65% on average of previous 2 March results.

Actually not a single sale occured in March anywhere on the hills (down 100%). Normally about 20 occur in a March month.

Now that's a measure of public confidence in insurers and the Government fixing things.

With sales down 88% in about one third of Christchurch, we can make the assumption that anything with more than cosmetic or inconsequential damage is unsaleable.

http://apps.reinz.co.nz/reportingapp/default.aspx?RFOPTION=Report&RFCOD…

by Muppet King | 13th Apr 11, 3:07pm 1302664070

I would just like to say that the "missed the boat" premise is inherently wrong. Lets say for a second I kept putting off buying a house for 5 years. All of you PI's are saying that if I put it off, I won't be able to buy a place, I will have "missed the boat". OK fair enough, but what about my children? Because they would have "missed the boat" by 20 odd years, does that mean they will never own a home? Don't be ridiculous.

by Kermit The Frog | 13th Apr 11, 3:13pm 1302664388

Missing the boat doesnt mean you cant ultimately get to your destination......its just that the fare on the next sailing might be more expensive

by ex agent | 13th Apr 11, 3:19pm 1302664768

I have a nice property to live in, am retired in my mid fifties and have more than enough passive income coming in. Why would I muck around with rentals giving such a pathetic return and then have a good chance of having to deal with a delinquent tenant. No brainer.

by ex agent | 13th Apr 11, 3:25pm 1302665140

my response at 3.19pm is in response to 28/29's earlier response. Enjoy the migration figures 28/29. It will only get worse so lets see what winter brings out in the NZ property market. Having no job or a low paying job in such a cold wet NZ might make more think about going over the ditch.

by Your Landlord | 14th Apr 11, 12:31am 1302697870

Any response?

by Donald MacRonald | 13th Apr 11, 4:21pm 1302668515

Migrant arrivals outnumbered departures by 2200 in February, even though 3000 people left for Australia on a permanent and long term (PLT) basis.

Seasonally adjusted, there was a net PLT migration gain of 500 in February, Statistics New Zealand said today. In the past year that figure had varied between 200 and 1000.

The gain of 2200 was down from 2600 in February last year. The net outflow of 3000 migrants to Australia in February was up from 1900 a year earlier but below the February 2008 outflow of 3500.

For the year to February, net migration was 8200, compared to 21,600 in the February 2010 year.

The 82,800 PLT arrivals in the February year was down 2% from 2010, while the 74,500 departures were up 18%.

A net PLT outflow to Australia in the February year of 23,500 compared with 34,400 in the February 2009 year and 15,400 in 2010.

by mandalay | 14th Apr 11, 7:36am 1302723377

brilliant... NZ owned by forigeners so the property invester boomers can die rich! Makes me feel so proud of you all...

by Wolly | 14th Apr 11, 7:45am 1302723904

You know something mandalay...them was the exact words spoken by the first Maori chief to spot the first boatload of poms....!

by Donald MacRonald | 13th Apr 11, 5:48pm 1302673703

Auckland and Wellington markets may well be leading the real estate market recovery with predicted increases in buyer and seller activity clearly evident. The low interest rate environment combined with the shortage of properties available for rent has resulted in upward pressure on rental prices in the main centres. This is driving renewed activity from both first home buyers and investors returning to buying mode. The result traditionally has seen a flow-on effect as current first home owners look to move up the property ladder.

Nationally the real estate market remains difficult to provide sweeping predictions for, as the impact on Christchurch and the South Island remain to be seen, while farmers are enjoying strong incomes due to commodity prices continuing to rise, surely this will have a flow-on effect in the rural and regional property sector.

Hayden Duncan, CEO

Harcourts New Zealand

Northern Mar 2011 Mar 2010 % Change New Exclusive Listings 523 615 -14.9% New Auction / Tender Listings 170 163 4.3% Property on Hand 3,364 2,891 16% Written Sales 487 446 9.2% Average Price $516,028 $526,400 -2% Written sales are considerably up on last year and on February, which indicates that buyers are now confident that it is the time to buy. Auction activity in the area is also up, reflecting that competition for homes has returned.

by muzza | 13th Apr 11, 6:52pm 1302677577

Pockets of strength shown in some provincial areas, includes Tauranga/Mount Maunganui-Papamoa. I'm not surprised, I've being monitoring there for a while and have recently made a couple of good buys, can't believe how well priced the properties had become, and must admit had a very long hard look to make sure no leaky home situation.

With regard to opinions being expressed, there are those who feel the situation has stabilised (in growth areas), while others are adamant there is quite a decline still to come. But, where's the problem? If you don't want to make any purchases then fine, and if you do who cares what others reckon? Just do what you feel is right for your circumstances. Why all the hot air about it?

by PeterPen | 13th Apr 11, 10:33pm 1302690788

Houses, houses, houses ... seems like it is the only thing going on in New Zealand. The pinnacle of boredom.

To the faction that seems to believe that houses (esp in AKL) should or will decline in price: on an economically fundamental level, you are right. Trading houses as a very major economic driver is long-term a recipe for decline, because it adds no value, is just a speculative undertaking. However: all cards are stacked against you. RBNZ, govt, media etc are colluding to prevent a reasonable correction in house prices, for the sake of their babybommer clientel.

To the faction that seems most amused about economic fundamentals and believes in a neverending speculation spree: consider Ireland, Spain, the US (the UK only escaped a house price collapse by massively stoking inflation) etc: real estate speculation leads eventually to economic devastation. Your speculation is hurting the country as a whole and is undermining the standards of living of future generations. Not taht you care, of course.

by the_dc | 14th Apr 11, 12:11am 1302696710

Good comment

by the_dc | 14th Apr 11, 12:13am 1302696823

Meanwhile in QLD

http://www.bloomberg.com/news/2011-04-12/noosa-queensland-coast-slip-as-australia-housing-cracks-emerge.html

by ex agent | 14th Apr 11, 8:10am 1302725459

How many immigrant have the where with all to buy the homes off those leaving NZ to live and work in the lucky country? Especially those coming from India and China to improve their lot here>

by Wolly | 14th Apr 11, 8:34am 1302726840

Immigrants~!.......aim for what......fewer but richer.....or heaps of unskilled future benefit dependents.

by me | 14th Apr 11, 9:25am 1302729937

Peter Pan, you make a comment about 'speculation', an emotive term, actually most PI's are probably simply trying to makea few investments so they won't need to be bludging off the State when they retire. Why, for instance, don't you say the enormous number who are on national super and who haven't been bothered to make much provision for themselves are 'hurting the country as a whole', as you might be more to the point then. But you are probably receiving it or expect an' entitlement' to receive it, like hundreds of thousands others..

by PeterPen | 14th Apr 11, 9:58am 1302731892

Hi "ME" - happens to be that most "PI"s I know have a very well-paying job, and half a dozen plus properties (mostly bought pre-bubble, of course) which they used until recently to minimize their taxes to near zero. Useful members of society? Not sure about that ... on an individual level I dont blame them, they are taking advantage of the situation, but of course it does not bode well for NZ as a functional society into the future. And it does not make NZ look like a well-run country either.

Btw, "bludging off the State when they retire" will in my view in a few years be a thing of the past anyways (coz NZ will be essentially broke), so you wont have to worry about them for too long, I would think.

Fair enough, get your "easy 100" out of your property deals, but also understand and live up to the damage this non-value-creating ponzi scheme is inflicting. Your gain is New Zealand's loss.

by Kermit The Frog | 14th Apr 11, 9:26am 1302729967

"heaps of unskilled future benefit dependents" ""

No problem there Wolly becasue we can just increase taxes on those damn pesky rich people - you know, the ones who earn over $ 70,000 a year.

I mean, how dare they take their tax cuts and spend it as they like....the cheek of it !

Isnt that right Bernard ??

by Donald MacRonald | 14th Apr 11, 10:06am 1302732384

This is interesting and WELL WORTH A READ.. written by property commentator Kieran Trass... You may have seen the REINZ’s latest property market information released through the media yesterday, be warned it is full of errors and the commentary is misleading.

The author of the press release paints a view of the market which is fiction and far from reality, the data is incorrectly quoted in much of the latest press release. That’s right many of the quoted REINZ figures in the press release are actually incorrect and the authors opinion on the current state of the market is either extremely naïve or deliberately misleading.

Of course opinions on the state of the market can differ however the facts are the facts.

REINZ’s press release is a misrepresentation of those facts, to portray what is far less than the truth, and is unacceptable practice which must be questioned.

Of course you could just call these untruths ‘typos’ but when you are the organisation in charge of a multi billion dollar monthly turnover industry you should not be having so many ‘typos’ which are clearly quite useful for the purpose of misleading consumers!

Here is the link to the article in y/days Herald online:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10718965

Here are the 'untruths' outlined in the article:

Untruth Number 1: “Auckland recorded the shortest days to sell, at 15”

FACT: Auckland’s days to sell were in fact 35 days (a 20 day difference!)

Untruth Number 2: “On an annual basis, the number of sales rose 1 per cent in March from the same month last year. “

FACT: So you could be forgiven for thinking there were more sales this March than last March even though that is untrue. Sales volumes this March were 5% LESS sales this March than in March 2010. Even on an annual basis the REINZ statement is incorrect as there were 55,049 sales in the year ended March 2011 compared to 68,857 y/e March 2010. That is an annual FALL of 20%!

Untruth Number 3: “values had leveled off in the month after declining sharply in February on the back of the Christchurch earthquake”

FACT: The Christchurch quake was on February the 22^nd, just 6 days till the end of the month and the amount of sales signed up in that 6 days would be very small so exactly how does that make values decline sharply in February on the back of the Christchurch earthquake? It didn’t!

Untruth Number 4: “median ‘days to sell’ fell 41 days in March”

FACT: Days to sell in fact fell TO 41 days in March

It should be noted that the figures quoted on the actual REINZ website appear to be correct however much of today’s REINZ data based press release was incorrect.

WHERE TO NOW?

There are so many blatant errors in the press release that it’s virtually impossible to be the result of ‘just a few typing error’s’ and implies a potentially more sinister nature of ‘window dressing’ statistics being released to the media with a ‘vested interest’ opinion based on a desired impact on confidence in the real estate market rather than on the strength of the data.

REINZ should make a public retraction of the errors and make the authors/editors accountable.

Who actually writes their press releases anyway?

Perhaps a serious financial fine may impose more responsibility on the REINZ as they should be setting an example for all others in the industry. No wonder so many agents have been found guilty of misleading behaviour when it has become the apparent norm by REINZ the ‘leading industry body’ of the real estate industry.

History speaks volumes and sadly this month is no exception as there have been many mis-representations in REINZ press releases quoted in the media over a lengthy period of time so it is pointless listing them here.

Just read some of their monthly commentaries at

https://www.reinz.co.nz/public/news/residential-market-news_home.cfm

My strong advice is that you DO NOT RELY ON ANY REINZ press releases until they can prove their press releases are accurate, trustworthy and independent.

by Gloom | 14th Apr 11, 10:38am 1302734306

Kieran was right. The REINZ data was correct.

It seams media is trying to flir the market.

by Snarlypuss | 14th Apr 11, 10:49am 1302734958

Action Plan: You know all those emails we all get on a Friday afternoon from a myriad of R/E agents, pumping us all up for a weekends frenzy of property buying. How about, we all just simply do a "Reply to Sender" or even better "Reply to All Recipients" ,copying Ronalds' link to Keiran Trass....

by Matt in Auck | 14th Apr 11, 10:42am 1302734533

The Herald article was wrong. I went to the REINZ website and their press release was right. But was it originally right or have they since corrected it?

Someone is either trying to spruik the market big time OR has appalling editing skills. Ether way there should be shame.

Would be nice to know what is up here Bernard and co., as someone's credibility (Herald or REINZ) is up in the air here

by Robert M | 14th Apr 11, 10:48am 1302734914

It does seem strange that a national median is at a record high, while not a single region is at a record high. I guess that is possible because when the Auckland median was higher, its relative share of volume was smaller. Pretty strange.

Here's something else. REINZ say there were 5858 sales nationally in March. But the 12 regions given on their web site only total 5050 sales. Where, then, were the other 808 sales?

I checked another month (March 2009) and in that month, the regional sales do add up to the national sales. I suspect there is a typo in the March 2011 figures.

by me | 14th Apr 11, 10:56am 1302735360

Peter Pan,

I have a sister who is a dentist and she owns some properties. Is such a person a useful member of society in your opinion? I would say she is a darn sight more useful member of society than a beneficiary who doesn't own property

by Snarlypuss | 14th Apr 11, 11:12am 1302736326

Dentsist! They are going to do it hard in these times. Not only are their charges eye-watering ( have you looked at her schedule of charges recently?), but they are discressionary. People will get a check up or work done, 'when needed' rather than the 6 months they might do now. Lets' see how you sister's properties go without the 'day job' cashflow...The same applies in general to many professions and other industries employees, who need to funds to top-up their 'renters' or just for everyday living costs.

by steven | 14th Apr 11, 11:17am 1302736620

"People will get a check up or work done, 'when needed' rather than the 6 months they might do now."

I think thats been the case for a few years for quite a few ppl, however in the last year I have noticed that its now very easy to get a short notice appointment with my dentist....and you just have to sit in the waiting room and listen to get it that ppl are doing the minimal work.....they are cash strapped.

To be fair on dentists try looking at the costs of their equipment and more importantly materials....when a drill bit to do a cap n root is $150~250 each and its possible they are 1 use items and you might go through 4 on a big tooth, let alone the cap iteself you can see where the cost are derived from. then of course there is the cost of becoming a dentist, its quite average to have a student loan around $100k....that to me is a worrying debt level...

So I dont see dentistry as a "greedy" occupation, actually I'd reserve that for lawyers etc.....

regards

by me | 14th Apr 11, 1:38pm 1302745107

Snarlypuss, youseem to have a bit of a chip on your shoulder, you should get it seen to.

You seem to have an attitude that a lot of hard study and a lot of skill should not be rewarded very much, well you are lucky she and her husband, who is a medical specialist, are even happy to work in NZ, given what they could get in Australia and elsewhere.

And what makes you think that PI's all have negative gearing, from what I can gather she doesn't have any loans now, nor do I for that matter.

by Snarlypuss | 14th Apr 11, 2:18pm 1302747516

Chip, 'me'? I just call it as I see it. And not everyone has the $350 to fix a filling or the $1200 to do the cap, that I just had done. I'm just stating that people will prioritise their spending. And food and petrol are likely to take prescedence over discressionary items. And I don't think all PI's have negative gearing. If we have the same mix Aussie do, it's only 67%. But that's quite a number in itself! And some drag on the tax take, don't you think? And as for loans outstanding....What is the alternative risk free return of your asset versus whatever net yeild you get from your properties? I'd suggest even if they are not negatively geared... they are just plain old, negative, in that context!

by Robert M | 14th Apr 11, 10:57am 1302735475

Sorry, I meant 5848 national sales (my typo this time). I've asked REINZ for an explanation and will let you know if I hear anything.

by Robert M | 14th Apr 11, 11:01am 1302735683

Peter Pan, Is this beneficiary your other sister? If so I suggest she clears her debts, borrows $150K or so to go to dental school, borrows another $150K to buy into a practice, works like billyo to reduce the debts, then borrows some more to build up a property portfolio. Good luck.

by Muppet King | 14th Apr 11, 11:15am 1302736516

I'm not surprised at the fudging of the details for the press releases. In RE, greed is rife, I've said it before. So they will lie and spruik as much as they can, and it will have some sort of effect, but you can't keep the wool over peoples eyes forever, the truth will eventually come out, that a broken down shack in Remuera is not worth the $500,000 you borrowed to pay for it.

by Your Landlord | 14th Apr 11, 11:21am 1302736893

A couple of years ago Kerian Trass was a big user of stats about the property market, for his "suburb watch" report and other commentaries. He made all sorts of predictions based around them.

Now he has swung very much against the stats.

In my view he is now damning the idea of the very reports he produces and sells.

What else has changed here I wonder.

by Gloom | 14th Apr 11, 1:30pm 1302744600

The stats are incorrect and my prediction is correct.

So I don't need to walk the length of the country.

by Donald MacRonald | 14th Apr 11, 11:26am 1302737209

No...he's just pointing out provable statistic inconsistencies in the REINZ press release y/day?

by Robert M | 14th Apr 11, 11:31am 1302737460

OK, the regional sales do total 5848 after all... back to the drawing board...

by REA | 14th Apr 11, 12:06pm 1302739560

A couple of random comments/suggestions from a career real estate agent:

When buying in this market:

Consider how appealing the property you are buying is to others, not just yourself. The reason for this is that if your situation changes a few weeks, months or years down the track, you may need to sell. There are plenty of properties out there who appeal only to 1 in 100,000 people. Try not to be that person.

When selling in this market:

If your house is painted 80's brown, paint it white.

Cameron

by muzza | 14th Apr 11, 6:36pm 1302763016

Snarlypuss,

You sound typical of unskilled or semi skilled people who think that the highly skilled should work for not much different to the next person. Instead of moaning about some charge, be thankful there are still people about in NZ who are still prepared to study hard at school and for 5 further years at university and that you don't have some cow-boy fiddling around with your root canal . And if you think it's that easy, why didn't you do it?