REINZ reports softer April sales and says market flat outside of Auckland and Christchurch

House sales in Auckland are still "well below" volumes seen in the boom times of last decade, but have hit their highest level for an April month since 2007, the Real Estate Institute of New Zealand says.

Nationwide sales volumes fell 4.1% in seasonally adjusted terms in April from March and the REINZ said activity was flat outside of Christchurch and Auckland.

There were 2,157 unconditional house sales in the city of sails in April 2012, down from 2,848 in a "strong March," but up from the 1,854 seen in April 2011. Auckland house sales numbered over 3,000 in 2004, and the last time they were as high as they are now was April 2007, with 2,843 sales.

Nationwide, there were 5,676 unconditional house sales in March. That was down from 7,330 in March and up from 4,897 in April 2011. Sales ranged between 7,000 and 10,000 in the mid 2000s.

The nationwide median house sale price in April was NZ$365,000. That was down slightly from March's record NZ$370,000 and up from NZ$360,000 in April 2011.

ASB economist Christina Leung said ASB's seasonally adjusted figures showed nationwide sales in April down 7.2% from March. However she urged caution when interpreting the figures.

"March and April are affected by the timing of Easter and school holidays shifting from year to year, meaning the seasonal impact is difficult to accurately measure.  In addition, annual comparisons over the past few months have been less stable, given the impact of the February earthquake on the Canterbury housing market over these months in 2011," Leung said.

"Looking at average sales volumes over March and April, turnover levels remain in line with the trend seen over the preceeding 4 months.  This suggests the overall trend in housing market activity remains steady," she said.

Housing demand had picked up over the past year, supported by low interest rates and increased confidence in the housing market.

"Nonetheless, the overall level of demand remains somewhat constrained by weak population growth and the subdued labour market," she said.

While demand had improved over the past year, the NZ housing market remained supply constrained. 

"Seasonally-adjusted median days to sell was unchanged from March, and continues to hover around average levels pointing to modest growth in house prices. However, the national average is masking regional divergences," Leung said.

"The housing market has been particularly tight in Auckland, where supply shortages have been most acute, and as a result house prices are rising faster in this region.  Nationwide house prices dipped 0.3% in April, although have increased 1% on a 3 month moving average basis. Regional data show this lift has been led by Auckland, while prices have remained flat in Canterbury and fell in Wellington," she said.

"Recent communications from the RBNZ suggests it is comfortable and unconcerned with the recent pick up in housing market activity and house prices.

"At the May Financial Stability Report, the RBNZ said it did not expect the lift in house prices to be sustained.  This suggests the RBNZ shares our view that reconstruction activity will help alleviate some of the pressure in the housing market," Leung said.

"It appears the Canterbury rebuild is on track to start around mid-year.  Building consents have started to lift, and employment has started to recover in Canterbury – led by increased employment in the construction industry. We expect the RBNZ will leave the OCR on hold until March 2013.  We continue to view a rate cut from the RBNZ as unlikely," she said.

See more in the release from REINZ below:

The underlying strength of the residential housing market is being reflected in an increase in sales in April and a steadying of the national median house price at near record levels.

April 2012 data from the Real Estate Institute of New Zealand (REINZ) shows there was a 13.8% increase in unconditional sales in the month, to a total of 5,676.  This was an increase of 689 sales compared with the same time last year. 

The national median house price eased back by $5,000 to $365,000, after reaching a new record high of $370,000 in March.  The national median house price is up 1.4% compared to April last year.  Hawkes Bay sale prices set a new record median for the region of $296,000, up 9.0% compared to April last year.

In line with the usual pattern for this time of year, April sales volume fell by almost 23% compared to March.  However, on a seasonally adjusted basis the national sales volume was down 4.1%.  All regions apart from Taranaki and Wellington recorded increases in sales volume compared to April last year, with Hawkes Bay and Northland both recording increases of more than 30%.  All regions apart from Central Otago Lakes recorded double digit falls in sales volume compared to March.  

Auckland recorded its highest number of transactions in an April month since 2007 – but the April 2012 total of 2,157 sales is still well below “boom” levels, at just over three quarters of the April 2007 sales total of 2,843. 

For the month of April, Central Otago Lakes recorded the highest lift in prices for the month (+19.0%), followed by Hawkes Bay with +5.3%, and Nelson/Marlborough with 0.9%.  Compared to April 2011, Hawkes Bay recorded the highest lift in prices (+9.0%), followed by Canterbury/Westland with 3.5% and Auckland with 2.2%.  The REINZ Stratified House Price, which adjusts for some of the variations in mix that can impact on the median price, is 2.7% higher than April 2011.

“Activity levels in the real estate market have eased slightly after a strong March,” said REINZ Chief Executive Helen O’Sullivan.  “While the national median price has pulled back from the record set last month the trend is still moving up, although not at a great pace.  The new record median price for Hawkes Bay is indicative of some improvement in activity in the regions, although for the most part activity remains flat outside the markets of Auckland and Christchurch.”

The national median ‘days to sell’ increased by two days in April compared to March, from 35 to 37 days. Over the past five years the median days to sell has averaged 41 days across New Zealand.

Canterbury/Westland recorded the shortest days to sell at 30 days, followed by Auckland with 33 days and Otago with 35 days.  Central Otago Lakes recorded the longest number of days to sell at 59 days, followed by Waikato/Bay of Plenty and Manawatu/Wanganui both at 55 days.

Nationally there were 739 dwellings sold by auction in April representing 13.0% of all sales, up from 555 sales (11.1%) in April 2011.  Transactions in Auckland again dominated the auction market, representing 69.8% of the national total of auction sales.  23.9% of all dwelling sales in Auckland were by this method in April – however this was down from the almost 30% of transactions by auction in Auckland in March 2012.  Transactions in Waikato/Bay Of Plenty accounted for 11.1% of the national total of auction transactions, Canterbury/Westland for 9.6%, and all other regions combined accounted for the remaining 9.5% of auction sales.

Further Data

Across New Zealand the total value of residential sales, including sections was $2.57 billion in April, compared to $3.35 billion in March, and $2.21 billion in April 2011.

The breakdown of the value of properties sold in April 2012 is:

$1 million plus                                                               248                                  4.4%

$600,000 to$999,999                                                   773                               13.6%

$400,000 to $599,999                                              1,423                               25.1%

Under $400,000                                                        3,232                               56.9%

All Properties Sold                                                  5,676                             100.0%

The REINZ Housing Price Index fell 0.3% in April compared with March.  The REINZ Housing Price Index recorded falls in all Wellington and Christchurch, but rose in Auckland, Other North Island, Other South Island and Sections.  Compared to April 2011 the REINZ Housing Price Index rose 2.7%, and the National Index is now 1.4% below the peak recorded in November 2007.  The Auckland Index however is 2.3% above the previous peak recorded in July 2007.