House sales volumes fell in April both year-on-year and compared with March, the Real Estate Institute of New Zealand (REINZ) says, and the national median house price also dropped despite a new all time high in Auckland.
REINZ said 4,987 houses sold in April this year, down from 5,848 in March and down 220 or 4% from 5,207 in April 2010. The national average days to sell was unchanged in April from March at 43 but up from 40 in April 2010.
The national median house price fell by NZ$5,000 to NZ$360,000 from March, but was up NZ$4,000 compared with April 2010.
“The April results reflect a steady market across New Zealand with signs of a lift in prices in the South Island, and Auckland prices still solid with limited supply ,” said REINZ chief executive Helen O’Sullivan.
“Volumes across the country were stronger than we expected on a seasonally adjusted basis, with only Manawatu / Whanganui and Wellington showing negative volume movements. The results reflect some cautious optimism with no great outbreak of smiles but certainly fewer frowns.”
The Auckland region recorded a new all time high median house price in April of NZ$479,500 topping the previous high of NZ$477,000 recorded last November. The average days to sell in Auckland dropped to 34 from 35 in both March and April last year. Auckland sales volumes rose to 1,854 from 1,768 in April last year, but were down from 2,437 in March.
“Auckland continues to lead the overall market in terms of price, with prices rising 2% compared to March and up 2% compared to April 2010," O'Sullivan said.
Sales volumes in Christchurch City increased a bit in April to 315 from 193 in March, but still well short of the 511 sales recorded n April 2010.
"While still a long way from previous activity levels, this indicates that the market is finding its way to a 'new normal'," O'Sullivan said.
The median price in Christchurch City increased by almost 5% compared with March, and increased 1.5% compared with April last year.
Prices in the South Island generally showed some strength in April compared with the previous month, she said, with Otago recording a 9.3% increase, Central Otago Lakes 8.2% and Canterbury/Westland 6.9%.
"On a seasonally adjusted basis Central Otago Lakes and Otago recorded the strongest lifts in volumes in April compared to March 2011, although the 72% lift in Canterbury/Westland’s volumes reflected both the extraordinarily low March and an easing of previous difficulties in obtaining insurance in this market," O’Sullivan said.
Across the country all regions other than Wellington, Southland and Nelson/Marlborough recorded a decrease in days to sell. Northland remained the region with the longest number of days to sell at 73 days; however, this is a 21 day improvement over the March 2011 measure of 94 days.
JP Morgan economist Helen Kevans suggested there was "limited upside" to house prices in the short-term with households continuing to shy away from taking on additional debt.
"Indeed, the clearest indication of continued caution among buyers is the large number of days it is taking to sell a house. Furthermore, the slow pace of home sales have kept inventory levels elevated, such that the backlog of unsold property sitting on the market will depress house prices further, as will the elevated level of house prices relative to household incomes," said Kevans.
(Updates add further detail including Helen Kevans' comments).
42 Comments
I see I can answer my own question, For $1m+ sales at least
April 2010 177 from 5207 3.4%
April 2011 210 from 4987 4.2%
So that is part of the reason for the Auckland average price being high because most of these upper level sale would be assumed to be in Auckland.
Wrong.. our economy is already dead and will remain that way until housing (amongst other things) become affordable again.
And who says we can't go back to affordable housing? Everyone will be better off except the banks, a small price to pay IMO.
Instead we have a whole section of society who think they are wealthy because of some yet unrealised 'value' in their property. Well guess what, that's not real wealth when our society is becoming poorer because of it. Its also not wealth when everyone realises that it was a scam and tries to cash out at the same time. That's a name for that hey Wolly !?!?
Or, what do you think is gonna happen to all those "rich" property owners when it gets to a point where enough people don't have enough money to pay for food or other basics? Don't think it could ever happen here?
Access to information - I have just been checking out the US real estate website Trulia.com, they have access to so much free info over there. Sale price history at the suburb level, sale prices per square foot, the actual sale prices of specific sales and their sale history, eg sold 3/3/2011 $550K, 4/9/2007 785K, 23/1/2001 570K, etc etc. The wealth of free info is fantastic. I feel here in NZ we are totally manipulated regarding house price info because of a lack free info. So a question, does anyone know why we don't have access to this info here in nz, especially with the government going on last year about opening up access to government stats, I thought this info would all be public, am I wrong?
Not so many property spruikers going ra ra either SK. I would have thought they would be a tad nervous after reading the latest thinking from the IMF and the NZRB. Then today we get the statistics from the REINZ showing volumes going backwards which will probably only get worse as winter selling conditions bite. The word is buyers are getting tougher to deal with by the day. They know they are in control and are worried that they are considering buying into a dropping market. There is the odd sale where the buyer pays what the vendor wants but you get that in all markets whether it be selling cars or appliances. Some people want it so much they will pay over the odds. People are forgetting we are on emergency interest rates. When they start to rise again it will certainly have a negative effect on how people feel about borrowing. Most families need larger interest bills like a hole in the head as they cope with the rising costs of food,petrol,power and insurance.
Hey Gareth,
How about you do some maths then... the raw volumes are down 14.7% in April compared to March, but the release notes that volumes are up 3% on a seasonally adjusted basis...
The fact that volumes are up on a seasonally adjusted basis is far more important that your butchered maths at the top of this article...
Focus on that rather than trying to invent the news....
I'd really like the spruikers to explain how they think the economy justifies increasing house prices?
the vast majority of business people I bump into these days are finding things tough. Met a couple of exporters today, they are really stressed (almost suicidal I fear). Construction industry dead, architects , surveyors etc struggling. Retail stuggling. Annual bonuses (if any) very limited.
Tourism and hospitality struggling
Cost of living soaring
Money, development and infrastructure spend to be sucked away to ChCh
Emmigration
sorry there just isn't enough money in this economy to keep the Auckl housing market going
I'd pick a 2-3% price drop in the next 4-5 months
ooohhhh, snooty! So you hang out with all the multi millionaires?
Actually I generally hang around similar people to me - upper middle income professionals: hardly the scum of the earth with no money!
but I also know wealthier business people, and many of them are struggling
but of course there will always be some money regardless of economic conditions.
But you didn't really answer my question, as per most spruikers. Can YOU argue that for more than say 5% of the population at the moment, the champagne is flowing and there is plenty of disposable income around? I would argue a big NO to that question.
and whilst the vast majority are on struggle street, property will stagnate OTHER THAN some exclusive parts of the market
I look forward to a logical and convincing argument that rebuts this argument and convinces me that property is going to continue to nudge upwards over the WHOLE OF AUCKLAND market
Mate, I know lots of people who have been duped by the likes of some of the ratlords on this site and have NO money, they are NOT scum of the earth and I take serious offence that money makes one GOOD! I Look at the slum lord Westminster, is he good??? I know some who are honest and hard working and for a number of reasons just haven't been abe to get that foothold in life some of us have been blessed to get! I also know people who are wealthy and care about the hard working folk of NZ who are really struggling... Yet some of the biggest crooks I have met in life are so called 'honest' businessmen/women!
Exactly. There's plenty of money around looking for good investments. Trouble is, there's not many good investment options in this country.
As to house prices, they'll do what the supply and demand formula forces them to do, regardless of any explanations and home-brewed theories.
What the inhabitants of this site are missing is that the economic difficulties experienced by some in this country are not caused by banks, or the "riches", or the babyboomers, or the Chinese, or (...insert any of the other "culprits" here...). They are caused by very low productivity, inefficiency and low quality of the output. The only thing this (or any other) Govt needs to do (easier said than done, of course) is to changes the policies to stimulate productivity and personal responsibility. Cut both the taxes and the Govt handouts. THEN the economy and incomes will grow, living standards will rise and things, including housing, will become "affordable".
Staggering numbers – see link below - what is different here in New Zealand ? Educated people (good earners) are leaving the country and the stage of the economy doesn’t attract enough middleclass immigrants or foreign property investors.
http://www.oftwominds.com/blogmay11/6-trillion-lost5-11.html
I used to be a believer that strong immigration demand, especially coming from Europe/ USA can keep property prices stable – not anymore.
Those figures are staggering and will be replicated to some degree in China with more than 65 million empty apartments. HK is in a bubble and will retrace as well. Recently a land auction here in HK did not attract one bidder. A month ago I was in Guangzhou city and work had plainly stopped on huge apartment blocks. Not the time to buy pretty much anywhere methinks.
Yes, indeed staggering....the thing to look at though is not just the losses in desirable areas which on the face of it are not as bad other areas. From what Ive read look at the losses in the far-outer suburbs, the ones built on what is otherwise almost waste land far out from the place of work (and much else), these losses are probably almost immeasurable in that they cant be sold....at any price....these are owned either by ppl in the lower-middle class and in high neg equity or jingle mailed to the banks who now own literally worthless property.....
A lot of this crazy ponzi scheme can be put down to Alan Greenspan's puts ie dropping the OCR time and time again til its at the zero bound to keep the economy going....result cheap lending.....insanely so....even Credit cards I read were typically 7%? in the US a few years back....(now though 30% is typical?.....so interest payments have gone up 4 times in 1 or 2 years....no wonder the American ppl are crippled and not spending.
regards
The OCR at a record low and they still can't get a decent bubble growing. Shocking.
What are things coming to when the Central Planning Committee can't seem to get house prices rising? Bring back Chairman Helen, our glorious leader, at least she and her side kick knew how to blow a good bubble.
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