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REINZ says house sales volumes slumped 20.2% in April compared with a year ago; median price down 1.8% in past month to $432.25k

REINZ says house sales volumes slumped 20.2% in April compared with a year ago; median price down 1.8% in past month to $432.25k

House sales volumes plummeted in April by 20.2% compared with the same month last year, according to the Real Estate Institute.

And the median sales price, which has been very volatile in recent times, fell by 1.8% over the past month to $432,250.

In terms of house price inflation, measured by the REINZ Stratified Index, which has also been volatile, the annual rate of inflation nationally fell to 8.5% from 9.2% a month ago. But the Auckland rate actually increased to 15.2%, from 12.1% a month ago.

However, in the previously overheating Auckland market sales volumes were down 21% on a year ago, while the median price slipped to $611,000 from $637,000 a month earlier. Here is the regional wrap-up around the country.

The extent to which the latest figures have been distorted by both having Easter in April, shortly followed afterwards by an Anzac Day on a Friday is hard to judge. Anecdotally, large numbers of people appear to have been encouraged by the timing of these public holidays to have an extended break between Easter and after the Anzac Day weekend.

In recent months house sales figures have in any case been severely distorted by the Reserve Bank's 'speed limits' on high loan-to-value lending, introduced in October. The LVR limits have affected the ability of particularly first home buyers to raise finance. This has has resulted in much lower volumes of houses sold in the lower price brackets, with the outcome being that both average and median house prices have been skewed.

The RBNZ indicated last week that the LVRs are going to be in place at least for the rest of the year.

The latest monthly figures released last week by government valuer Quotable Value showed declining rates of annual price increases, but a distinct uptick in prices during the past month. The latest REINZ figures, which can generally be expected to be more up-to-date, show something different again.

REINZ said there were 5670 unconditional residential sales in April, a 20.2% fall on sales recorded for April 2013, and a 22.5% fall from March.

It said April "typically" included the Easter break and school holidays, "however on a seasonally adjusted basis the level of sales was down almost 8% compared with March and down 18% compared to April 2013". 

REINZ chief executive Helen O’Sullivan said the sharp fall in sales volumes in April had impacted all regions, as well as Auckland and Christchurch where much of the price pressure has been in recent times.

"The fall in April compared to March 2014 and April 2013 deepens the underlying trend for easing sales volumes," she said.

"April is generally a softer month for real estate sales coming off the back of a generally strong March and with the added complications of school holidays and Easter.

"However, these factors cannot explain the entire drop between April this year and April last year – the volume of sales has retreated to 2012 levels, and is the seventh lowest April volume recorded by REINZ.".

O'Sullivan said the number of sales in the sub-$400,000 category continued to fall faster than the market overall, "suggesting that the LVR restrictions are continuing to have an impact on buyer intentions at the lower price points"

She said the number of sales below $400,000 fell by 31.6% compared with April a year ago. This followed a fall in sales below $400,000 of 21.9% between March 2013 and March 2014.

"The lift in the Official Cash Rate by 0.5% over the past two months is likely to have also had an effect. 

"Commentary from real estate agents around the country indicates that first home buyers are an even scarcer commodity than they were in October and November last year."

But at the same time, O'Sullivan said there was increasing activity in the $1 million plus category, not only in Auckland but in a number of other centres as well.

Westpac senior economist Michael Gordon said April was "another mixed bag" for the housing market, according to the REINZ figures, with sales falling further but prices remaining stubbornly high.

"House sales slid another 5.5% based on our seasonally adjusted estimates. That leaves them 18% below the peak reached last September, just before the RBNZ's restrictions on high loan-to-value lending came into force."

He said that April data needed to be treated with caution - "a point that we'll probably be making several times over coming weeks".

"Standard seasonal adjustment programs can cope with the shifting timing of Easter, and while Anzac Day is not explicitly accounted for, it is a regular part of the April landscape. What's harder to compensate for, however, is the potential interaction between the two holidays when they fall in the same week, as they did this year - some people effectively treated this as a week-long break, which may have temporarily depressed the level of activity. So the drop in house sales in April may prove to be overstated, but we'll need to withhold judgement until we see the May figures."

But Gordon said that "in contrast", house prices - which won't have been affected by the Easter timing - continued to hold up.

"The stratified price index rose 0.6% in April, on top of a combined 2.8% increase in February and March. There's no obvious sign that the price index was skewed upward by the composition of sales, at least for the April month - in fact, sales fell more for high-end than for low-end properties. And it's notable that banks had started to ease their lending criteria by April, in order to get their share of high-LVR lending back up towards the 10% limit (by March the share had fallen to 3.6%). So this may point to a second wind for house prices, albeit a modest and temporary one. 

We prefer the Quotable Value monthly house price index as a more accurate measure of house prices. This has registered a substantial slowdown in house price growth since the start of the year. The difficulty is that Quotable Value only records sales upon settlement, meaning the data is effectively two months behind the REINZ series.

"So the jury remains out on the trend in house prices. All we know for sure is that house price inflation was slowing two months ago."

ASB economist Daniel Smith said while activity continued to slow, signs were that price pressure remained elevated in the Auckland and Canterbury markets.

"Nationally, days to sell – a good indicator of the degree of pressure in the market – edged lower to 34. That is more or less in line with what we saw over most of 2013. In Auckland, days to sell fell from 32 to 30 – again, in line with where this measure sat through most of last year. In Christchurch, days to sell stayed at 28.

"The REINZ stratified price index also suggests that house price inflation is not set to slow dramatically. The overall index was down 0.2% month-on-month in seasonally-adjusted terms, with the annual rate of growth slowing to 8.5% (down from 9.2% in March but still above the annual rates seen in January and February). Looking at the three-month-moving-average, annual house price inflation in Auckland remains very stable at 14-15%. In Christchurch, the annual rate has actually lifted a little over recent months, currently sitting at 10.6%," he said.

Smith said the REINZ data for April confirmed what was seen in data from Barfoot and Thompson last week – sales volumes dropped noticeably during the month.

"The uniform nature of the slowdown (across regions and price brackets) suggests that the timing of holidays during the month may have played a part, alongside the general slowdown in activity that has been seen since late 2013.

"While activity is declining, the degree of pressure in the market remains acute in the Auckland and Canterbury regions. That is not surprising given strong population growth and the very low levels of homes on the market. A slight lift in new listings over recent months, combined with lower demand due to the LVR restrictions and, increasingly, higher mortgage rates, should see price growth slow steadily over the next year or two."

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62 Comments

Yup, my weekly open homes mailing from trademe is now shows huge numbers of properties in central auckland with asking prices.  6 months ago it was one or two and everything else was auction.
The market has slowed dramatically.

POP !?

Young working couples purchasing 800k properties with mortgage repayments of 70% of their incomes.....watch out

4 months from the election date ~~~
 
Can it hold on for just that long?

Yep, Look like David and Russell are in for a chance now.. be sure that if they are in charge it will be plummet even further..

Great news!! We just need about three years worth of results like that, and we might actually get some normality back into our housing market.

Not in Auckland though - "But the Auckland [inflation] rate actually increased to 15.2%, from 12.1% a month ago."

Median sale prices droped compared with last month

  • auckland region dropped to $611,000 from $637,000
  • metro auckland dropped to $630,000 from $655,000
  • and central auckland (former auckland city council area) to $694,500 from  $750,000 

 

"The REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can impact on the median price, is 8.5% higher than April 2013, at a new record of 3971.2. The Auckland Index has risen 15.2% compared to April 2013, with the Christchurch Index up 13.6% and the Wellington Index up 1.0%"

 

 

According to the graph this happens in Auckland every year - a high point in March followed by a plummet in volumes in April. Why?
 
The big dip is always January which makes sense.

Easter & ANZAC weekend?
 
But sales are well down on April last year too.

The Auckland market is really heating up, rising prices at the same times as declining sales in a supply constrained market.  When capital gains are nearly assured for years to come people who are upgrading or moving house tend to keep the property they are leaving rather than sell.  This leads to fewer listings and sales but sharply rising prices and when combined with the opportunities stemming from the unitary plan I predict Auckland prices to keep sharply rising for several more years. 

Really?  With the National Government imploding and Labour/Greens wanting to introduce CGT and restrictions on foreigners buying property I'd say all bets are off...
 
Better sell while the market's at it's peak!

“Expectations that house prices have further to rise remain high in ASB's quarterly survey of housing market sentiment.
A net 48 per cent of respondents expect house prices to increase over the next 12 months, virtually unchanged from a net 47 per cent in the previous survey….
…it remains among the snowy mountain tops of this indicator's historical track.”
 
Value-add, you need to do more research, the Auckland peak is years off. 

Yeah I saw that, but expectations are one thing and anyway, that's less than half the respondents!  I see the same information you do chap - you just have a huge self interest to pedal and I am but a spectator.

"I am but a spectator"...  agreed, just another arm chair expert. 
 
Can't wait for your next piece of 'expert' advice. 

Never said I was an expert, not sure where you got that....?
 
My point is National is looking shaky and losing support - Labour has very different plans for the housing market - surely it's a risky time to invest given their CGT and foreign buying policies...

It's more than half.
 
'Net' 48% expecting rises means 74% expect rises and 26% expect falls.

Eeek, my mistake, skimmed through!

GOOD , its about time
 

Anyone else notice there haven't been many listings in Auckland on trademe in the past few weeks? And some have been advertised on realestate.co.nz and not trademe. The number of listings on trademe is dropping off day by day. What does this mean?

Trademe's fees are getting too high? 8% for listing a bike = forget Trademe

Realestate.co.nz report:
 
New national listings in April showed higher levels than historic years, with 10,245 new homes come on the market. This equates to 2% more than the number of new listings seen in April 2013.
In the main centers, Auckland, reported 3,329 new listings, down 4% from April 2013, Wellington was down 9%, with just 755 new listings last month. But Canterbury reported an increase with 1,211new listings, up 2.5% from last year.
 
http://unconditional.co.nz/blog/property-report-april-2014/

Dive dive dive!!

Has any Govt around the world apart from Zimbabwe etc managed to bring the price of houses down apart from when there has been something like a GFC.If so how did they do it and why aren't we doing it.I predict house price to continue to rise even in the provinces unless we have another GFC or something like it.

And in the US, house prices didn't drop because of the GFC, rather prices were dropping on their own which triggered the GFC.

Relax people .... just watch Mr Bill English and Mr John Key avert any downward trend in NZ esp. Auckland property prices ....election only 4 months away :)
 
Anyway, such a trend would go against the mantra from Big Daddy et al ...as we all know Auckland prices can only go in one direction ....and that is UP !!
 
And don't forget of the endless stream of cashed up immigrants and investors buying property here in this fine city .....and the supply shortage to boot !!
 
Get on board the "real estate" bonanza train ....it just one long non-stop party ride !!
 
 
 
 

Yip, nothing but massive capital gains and profit in the Auckland market for years to come. 

Yep, that's the story ....fill yer boots maaaaaate !! :)
 

Don't be a victim CH

Happy123 ..... how do you know that I am in or out of "the game" ???
 
Please do not assume, as you make an "ass" out of "u" and "me" ....
 
Here's one for ya ..... "Be fearful when others are greedy and greedy when others are fearful" .....

News from China has house prices struggling there with tales of up to 40% coming off prices in some cities'
http://www.macrobusiness.com.au/2014/04/tier-1-chinese-cities-begin-prop...
How will this affect NZ house prices?, Suspect there will be two forces in play. First one will be to repatriate money from NZ to strengthen Chinese businesses. Second one will be to bring more money out of China before companies crash and the corruption task force catches up with them. Interesting times with the election coming up here. Looking fwd to see what all the other parties platforms will be to immigration and foreign ownership. I know Nationals - their policy seems to be let everyone in so there are people to build houses for all the immigrants. (Chicken Vs Egg anyone)
 
 
 
 

House prices can drop and that make exciting biting.
The best bargains are bought when the market stalls as vendors can be screwed mercelessly
into the ground.
Once bought 2 houses from desperate people going broke.
Then let them remain on as tenants in their own houses so they paid the mortgage but they still went broke as it cost them the same.
Sold the lot 3 years later for 50% more.
 
 

You are an AWESOME guy! Keep up the good work Bigdaddy... 

You're parodying a greedy landlord right buddy?  There's no way someone so callous could actually exist...

Well, he could exist, but not without being a frontrunner in the prestigious Most Likely To End Up As A Mutilated Corpse Hanging By Its Ankles From a Lamppost awards.
But then, sites like this are always crawling with Walter Mitty pretend-tycoon fantasists, so that scenario's probably closer to the truth.

so many NICE people on this site...

Yes, lots of them.
But also a couple of complete dickbaskets who need a slap occasionally.

'Dickbasket'?! A new one for me. Inspires me to coin 'cockbucket', even more guttural in the Anglo-Saxon traditoin :)
 

Oooh, 'cockbucket'.  I like that one, and look forward to using it. 

I agree with you . No real person could be so cruel and brag about it. Big Daddy has lost any credibility he had left . Someone has created a character that could simply not exist. 
 

Bigdaddy is just winding everyone up. If not he's big beliver in karma..

When so many people are struggling to put food on the table let alone buy a house there are just some things you do not say and this is one of them. Just like you would never say to a woman they have put on some weight.

VA - what is so callous about Bigdaddy's comment?
 
He is merely pointing out components of a Freemarket. The ups and downs are important in any market. There are both buyers and sellers in a rising and falling markets.
Are you suggesting that the world should shift away from the market practices of centuries?
 
It is not callous to buy low, sell high it is sensible and often people who acheive this are very good readers of the market and all influences in the market. Maybe ask Bigdaddy some questions on how he got his timing right etc? And then work out what the drivers were...
 
A correctly functioning free market should not protect anyone who has gone in over their head......when failure or reward are interferred with you create distortions in the the normal market settings. The current taxation system also creates distortions in regards to failure and reward and people need to get their heads around that issue. The taxaton system is not a level playing field.
While housing is a human necessity for survival the more the market gets tampered with the more distorted prices become. It is easy to point a finger and accuse someone of being callous....But aren't the real callous people, the Politicians, Councils and public servants who created all the market distortions in the first place?
 
Houses are stock the same as anything else you buy or sell....in NZ we are open for business with our houses the same as any other goods or service that are traded locally and internationally......Some NZ'ers are going to have to adjust their thinking in this competitive environment......sometimes it might be cheaper to rent rather than buy, or buy rather than rent, sometimes it will be better to buy and hold etc. Your house is not only the place you live, it should also be treated as an investment. Everytime the busy bodies in Government and Councils etc interfere then there will be ramifications on pricing levels....and the market has to factor these in .......if some posters on this site concentrated on ensuring the market was kept free from interference then housing prices would be more stable and only reacting to the basic market fundamentals.....
 
It is well known that NZ is a great place to invest? WHY? Socialist countries always have many willing participants who will interfere in the market place which distorts prices. And  the price distortions allow investors to make money by buying and selling on the distortions ! It doesn't matter what the market is....the markets are live.....people need to wake-up to the fact that their personal needs such as housing are part of a far bigger market the same as food, oil, currency etc. The I can afford it on my wage/salary.....happy-ever-after-approach.....is not investing in the market it is nothing more than a buy, hope and pray strategy.

Everyone loves exciting biting.
Anyway, don't waste another second posting comments, get out there and get buying and let us know if you've made 50% in three years time!! Geronimo!!!!

Wow DaddyO....big and fat and proud....you're like a king on a throne.....your subjects bow to your wealth and power ....not because they respect you but because they have no choice....well Hail Caesar to you BD and good luck with your empire!

We have an estimated 40,000 extra migrants coming to roost this year and they predict next year will be even more, this all spells more pressure on exisitng stock, never a bad time to buy property!

No thanks!  But by all means, you go for it - keep buying!

My job takes me around quite a bit and I meet large numbers of different types of people, immigrants included. Most of the immigrants I meet are not wealthy, cannot afford to buy a home and are struggling to build a deposit like the so called  'real kiwis' are. Now I'm NOT saying there aren't bunches of  immigrants arriving with cash-filled backpacks going to buy loads of property... I'm saying don't rely on them. Pray those overseas moguls keep investing - therein lies your doubling Auckland and Christchurch house prices... And then in 4 months time you have Winston making kings... again!
Have a fab week property buying... thank heavens no public holidays to hold you back this week ;)
General H H

In my opinion there are two big opportunities that exist now.  First, areas effected by the unitary plan and now allow low rise apartment building.  You can get apartments built at $2,500 / sqm and they are selling at $5,000 / sqm.  The next is the leafy coastal Auckland suburbs, there are going to be a lot of people making good money in this economy/market and they always look to upgrade to these areas.  Still bargains to be had further afield like Bucklands Beach, Mellons Bay or up the coast.   

Bargains in Bucklands Beach?  Macleans Zone?  Prey tell....
https://www.qv.co.nz/suburb/area-profile/bucklands-beach-auckland/175

"Bucklands Beach is a family-friendly suburb with stunning views from most homes toward the beautiful, white sandy beaches in the area"
 
It doesn't mention the 35 min ferry service to the CBD and 25% cheaper than the central Auckland suburbs.  Ripple effect....

'white sandy beaches'?  Where?  Have you been to Bucklands Beach?
 
And where are the bargains?  It's an expensive neighbourhood.
 
I'll keep my 10 minute bike ride to the city centre, and you can have your 5 minute bike ride to the ferry, plus get there 10 mins early so you don't get turned away when it's full, plus 35 minutes, plus 5-10 mins on the other end to get to the office.  It's all a matter of personal preference, they might not be white sandy beaches, but they are nice enough, allot of people like them and the views and the school zones and hence there are no bargains.  It's cheaper than the central suburbs because of the commute. Bucklands Beach will never be more expensive than Mission Bay.

Goes back to my original comment, in this market I would buy unitary plan affected land that can be developed with high rise units.  OR, if you don't have the stomach for development, I'd buy an existing house in a leafy coastal suburb and watch it double in value in the next few years.  The central Auckland suburbs, in my opinion, won't rise as much as coastal property further afield because they've already had significant gains...  ripple effect. 

Bucklands Beach is not about to be hit by a ripple, it has no catching up to do, it's not a suburb full of bargains. Refer to my QV link above, Bucklands Beach has already had the same gains as the central suburbs.  up 37% vs QV.  Mt Eden up 36% vs QV. Parnell up 31%. Hern Bay up 35%
 
It's a bit cheaper because it's further away, always has been, always will be.

Secondary cities with growing populations which have not experienced auckland type price rises are the next in line to experience the 'ripple effect'.
Hamilton already seeing some price rises as is New Plymouth.  Palmerston North looks the best value from my research, population increasing and real lack of listings.  Tight markets like these can be very 'price reactive', p.n saw 20% year on year gains 2004-2007 in response to auckland boom the preceeding years. Affordability isn't the limiting factor in these cheaper markets, its lack of confidence in market, which can change very rapidly after the first lot of auckland PI's start piling in.

Bucklands Beach (and other coastal suburbs) have kept up with the central suburbs before the ripple has even kicked in.  These suburbs are still cheaper than central suburbs so buyers will be forced out there by higher prices in the central locations.  The fact that these suburbs have outperformed other non-central suburbs should tell you something. 

If we apply the logic from your original statement, to your current statement, we come up with  "The coastal suburbs, in my opinion, won't rise as much as non-central non-coastal suburbs because they've already had significant gains.."  Which is it to be, invest in an expensive Bucklands Beach property, or elsewhere?

And public (free) decile 10 schools. 

Overviews of the housing market are pretty much useless tools when not used in conjunction with the psychology of the rebellious authorities who show contempt at all levels. E.g. Councils, BRANZ, RBNZ, Politicians, etc......
Has there been a change in attitude by the authorities to address the known issues? Short answer NO.
 
It's all about the numbers of people who are prepared to buy.....basically conforming to the market the authorities have set and the number of people who are rebelling against the authorities and not buying.
 
Rebelling and conforming are not opposites.....as both are responses to pressure.
 
The population as a whole is not rebelling against property prices.....therefore no change to the status quo.....while the RBNZ has applied it's LVR tool anyone buying now knows that there is house price inflation in land and building so one year after purchasing the inflation has placed the purchaser into safe territory as the asset value has increased.
 
A median price is not the market value of a house.....imagine if a farmer used the median price of all cattle sold across a region/country as a value that he/she would pay when purchasing e.g. weaned calves.......All the heavy weights ready to slaughter would distort the price.