November house sales saw the median price rise to a record NZ$383,250 according to data released by the Real Estate Institute of New Zealand (REINZ) today.
There were 7,454 properties traded in the month, up from 6,640 in October, and up 24% from the same month a year ago. March and November are usually the peaks for house sales transactions (see this chart).
The median house price rose only 4.2% however.
In fact, nine of the twelve regions in the REINZ report have a median price lower than the national median. Only Auckland, Wellington and the Central Otago Lakes area have median prices above the national level.
The reason for that is the very strong activity level in the Auckland region with 40% of all sales in November happening in Auckland at a median price 40% higher than the national level.
In 2008, Auckland house prices were 28% higher than the national median; in November 2012 they are 41% higher, a gap that hasn't been this big since 2003.
Auckland house prices rose NZ$50,000 in the year, a gain of 10% to NZ$540,000.
Earlier, one big Auckland agent reported 'average' prices of NZ$627,721 for the properties they sold, a rise of NZ$60,000 in the past year. ('Average' prices can be distorted by a disproportionate number of transactions at the margins; median data reports the middle transaction, and itself is often misunderstood.)
Highest sales in five years
The level of residential house sales in November were the highest for a November in five years, and also the highest for any months over the five years. The REINZ says the lift in volumes is now spreading out to regions other than Auckland.
Westpac chief economist Dominick Stephens noted the REINZ house price index, calculated using stratification that gives an averaging of sales prices for common groups of houses and was developed in partnership with the Reserve Bank, is now 7.3% higher than it was a year ago at 3504.
"This is consistent with our long-held forecast that house prices would rise 6% in 2012 (on the Quotable Value quarterly measure), accelerating to 8% in 2013. If house prices do keep rising as we expect, the Reserve Bank would most likely increase the Official Cash Rate in 2013," Stephens said.
He also said Westpac's economists had long suggested low interest rates would ultimately spark a more generalised house price upturn across New Zealand, not just in Auckland and Canterbury.
"The data is tentatively evolving along those lines, although the full story is complicated," Stephens said.
This is because the Canterbury market has "distinctly" cooled.
"The number of house sales did rise in November, but market turnover is no more vigorous now than it was six months ago. Consistent with unchanged market turnover, house prices have basically stagnated in Christchurch over recent months, and annual house price inflation has dropped to 3.8%. We can only speculate on the cause of the market slowdown in Christchurch. One suggestion is that the Residential Red Zone settlements earlier this year had a price effect that has worn off."
"Another is that people are more confident of Christchurch eventually overcoming its shortage of housing, now that construction activity has gotten moving," said Stephens.
And although Auckland remains the hottest housing market in the country, the City of Sails' market paused for breath in November.
"Seasonally adjusted house sales fell 2.5% after surging 12% in October. And seasonally adjusted prices fell 0.3% in November, but remain over 13% higher than a year ago."
Meanwhile, Stephens said some other regions within New Zealand are closing the gap a little.
"In November, the strongest price increases were recorded in the South Island ex Christchurch, and the North Island ex Auckland and Wellington. And turnover is now rising in many regions of New Zealand, although some pockets of weakness do remain."
Here is the REINZ media release that came with the data. All our related real estate charts are now updated with the latest data.
Ongoing strong demand drove robust sales volume growth in the residential property market during November with the number of sales up 24.1 per cent on November 2011. The national median house price is at a new record of $383,250.
The Chief Executive of the Real Estate Institute of New Zealand (REINZ), Helen O’Sullivan, says that despite a surge in new listings during spring, demand continues to outstrip supply in key markets such as Auckland.
“The activity in the Auckland market is now starting to see some spill over into other parts of the country, with increased buyer activity, although there are some remaining markets which are yet to see this effect. The lift in national sales volume to a five year high and the new record medians in Auckland and Otago is indicative of the real estate market gaining in confidence. Volumes remain well below the previous market highs set in the period from 2003 – 2006, indicating that tight supply remains the key factor behind increasing prices.”
“The Auckland market is increasingly characterised by the rise in the number of auctions, with sale by auction becoming the dominant method in some parts of the region. With over 38% of all sales in Auckland completed by auction, and more than one in five sales by auction across the country during November, we are seeing something of a change in the way both buyers and sellers are approaching the market. What we do know is that most properties that sell by auction sell for higher prices and faster than other properties. The market is responding to this. ”
Sales volumes
REINZ data shows there were 7,454 unconditional residential sales in November, an increase of 1,446 sales (+24.1%) compared with the same time last year and an increase of 12.3% compared to October. On a seasonally adjusted basis November’s sales were 1.2% lower than October and 19.3% higher than November last year.
All regions recorded increases in sales volume compared to November last year, with Central Otago Lakes recording an increase of 45.9%, followed by Otago with 38.7% and Auckland with 28.9%. All regions, apart from Hawkes Bay, recorded increases in sales volume in November compared to October, with Otago recording a 36.6% increase followed by Manawatu/Wanganui with a 19.4% increase and Central Otago Lakes with an 18.1% increase.
Prices
The national median house price increased by $3,250 from $380,000 in October to $383,250 in November; an increase of 0.9%. Auckland’s median house price moved up 1.9% compared to October to a new record median price of $540,000. The national median house price is up 4.3% compared to November last year, while the Auckland median price is up 10.2% compared to October last year. Otago also recorded a new record median price of $258,000, up $18,000 (+7.5%) compared to October. Canterbury/Westland again reached its record median price of $345,000 last reached in August.
For the month of November, Northland recorded the highest lift in prices for the month with an increase of 10.8%, followed by Otago with 7.5%, and Hawkes Bay with 6.4%. Compared to November 2011, Auckland recorded the highest lift in prices with an increase of 10.2%, followed by Wellington with 5.7% and Central Otago Lakes with 4.9%.
New record median prices were recorded in November for New Zealand, Auckland and Otago in November, with Canterbury/Westland also hitting the record median price it last reached in August 2012.
The REINZ Stratified House Price Index, which adjusts for some of the variations in mix that can impact on the median price, is 7.3% higher than November 2011 and is at another record high. The House Price Indices for Auckland, Christchurch and Other South Island also set new record highs in November.
Days to sell
The national median days to sell eased by one day in November compared to October, from 32 to 33 days, with the number of days to sell also improving by two days compared to November 2011. For the month of November, Canterbury/Westland and Otago recorded the shortest days to sell at 28 days, followed by Auckland and Wellington with 30 days. Northland recorded the longest number of days to sell at 58 days, followed Central Otago Lakes with 49 days and Taranaki with 46 days. Over the past 10 years the median days to sell for the month of November has averaged 33 days across New Zealand.
Auctions
Nationally there were 1,539 dwellings sold by auction in November representing 20.7% of all sales, up from 909 sales in November 2011 representing 15.1% of all sales. This is a new national record for the percentage of sales by auction and beats the previous high of 20.2% reached last month. Auction sales in Auckland also reached a new record with more than 38.8% of all sales in the region in November sold by auction, or more than 1,130 sales.
Transactions in Auckland again dominated the auction market, representing 73.7% of the national total of auction sales. 38.8% of all dwelling sales in Auckland were by this method in November; this was up strongly from the 27.0% of sales by auction in November 2011. Sales by auction in Waikato/Bay Of Plenty accounted for 10.3% of the national total, Canterbury/Westland accounted for 7.7% of the national total, and all other regions combined accounted for the remaining 8.3% of auction sales in November 2012.
Further Data
Across New Zealand the total value of residential sales, including sections was $3.62 billion in November, compared to $3.15 billion in October, and $2.67 billion in November 2011. For the 12 months ended November 2012 the total value of residential sales was $33.54 billion.
The breakdown of the value of properties sold in November 2012 is:
$1 million plus 390 5.2%
$600,000 to$999,999 1,251 16.8%
$400,000 to $599,999 1,893 25.4%
Under $400,000 3,920 52.6%
All Properties Sold 7,454 100.0%
REINZ Stratified Median Housing Price Index
The REINZ Housing Price Index increased 1.4% in November compared with October to sit at 3,544.4, a new record high. The REINZ Housing Price Index also recorded new record highs in Auckland, Christchurch and Other South Island. All areas, apart from Sections recorded increases in November. Compared to November 2011 the REINZ Housing Price Index rose 7.3%, Auckland rose 13.4% and Christchurch 3.8%.
Median price - REINZ
Select chart tabs
(Updated with comments from Westpac's Dominick Stephens).
71 Comments
There is no 'gap' is there Tweak....Fiddle agrees....the govt is serious about managing the economy!...especially serious about the rising cost of housing...insane property prices are fully supported by hot money flooding into NZ and....and the cheap easy peasy credit condition the banking bosses have told Tweak and Fiddle, must remain in place until they have boosted their fatter for ever profits.
Serious they are!
Auckland has a new economic model : uilt houses and sell them to each other and get your income tax free.
This is the reason why all immigrants settle into Auckland as this is the most profitable and least cumbersome entry into an income producing enterprise.
I predict Auckland will keep growing into the everlasting future as more and more people quit their everyday job to be either property "investors" or developers and grow rich and successful.......the rest of New Zealand can go suck.....
Heard a story from a friend at an auction last week :
GV at 460K
Buyer offered 580K
Seller accepted but has to go for auction as advertised.
Auction day : House sold for 660K in 30 mins. !!!
Hurrah for Auckland....land of the rising property bubble.
what annoys me about the REINZ release above, and the subsequnet reporting by the mass media, is the initial emphasis on statements like
"The national median house price is at a new record of $383,250".
In the scenario we're in at the moment, this is a meaningless statement. To those of us in the other parts of the country, a national median driven by a lack of housing stock in Auckland and the unfortunate circumstances in Christchurch is meaningless.
Sure the realestate situation in Auckland is newsworthy, and I as a Wellingtonian want to be informed about it, but it's newsworthy only when discussed within the context of the Auckland realestate market - there's no need to quote it's effects on the national median.
case in point, the first paragraph in the latest newsletter from QV:
"The latest QV property trends shows that nationwide values have continued to climb in November, up 1.9% over the past three months. Values are now 1.5% above the previous market peak of late 2007"
then they have the cheek to say:
"We hope you have a safe and relaxing holiday and look forward to continuing to assist you with smart insightful property information in 2013."
how can they say "nationwide values have continued to climb" when the climb is nearly all attributed to the Auckland realestate market then claim they're providing "smart insightful property information"
Grrrrrrr!
If the median house price in Auckland is $ 540 000 , and the national median is $ 383 000 , then if we take Auckland out of the equation , the national median becomes what ? ...... something well below $ 383 000 methinks ....
..... if " baby-boomers " are starting to retire , one suspects that they'll be net sellers of expensive Auckland properties , not buyers ..
the 'born 1945-55' cohort is the one to watch that is the real bulge. they still have good years left in them, but probably not many working ones. The oldest ones are 67 now this lump has had a big effect all they way through, so it seems reasonable that they will continue to have a big impact
https://www.reinz.co.nz/reinz/public/reinz-statistics/reinz-statistics_…
Auckland has 2,920 sales at $540,000 = 1,576,800,000 (average - they use median so total actually greater). NZ had 7,454 at $383,250 = $2,856,372,000. So the average of the medians is presumably 1,279,572,000/4534 = $282,217.
Excellent chart , love the pretty squiggly lines ... ... if we take strata 5 & 6 as our midway point , we begin in January 2002 with a median house price of $ 135 000 - $ 140 000 , and end up in July 2012 with a $ 275 000 for strata 5 and $ 300 000 for strata 6 ..... seems fair enough . More or less a compounded return of 7 % per annum on initial cost ....
Prices are going to increase with unmet demand, on and on and on.
Just with New Zealands natural population growth not including any outside factors like incoming new citizens, New Zealand doesnt now build enough houses.
A huge part of the Trade workforce have left New Zealand over the last 3 years of neglect, 9200 tradies left for Australia.
Many of the remaining trade workforce are heading to Christchurch and many of the more mature Tradies are retiring who usually employ 3 to 6 guys.
Building materials continue to rise, tin, glass, timber, concrete,Fixings etc.
The regulatory Process is getting thicker by the day, some say the new scaffold rule will add $2,500 to every new home, and everytime you need to work on a roof on existing homes?
Councils are still gouging with Council Contributions and taking their time at that.
Residential Construction Finance is almost non existant with the demise of "the entire" Finance Company sector colapse.
Banks are looking at each others customers now as the new mortgage market shrinks.
If you think Houses are expensive todat, just wait untill tomorrow, if you cant afford one today, as costs are increasing faster than wages, how do you expect to own one next year?
The average age of a New Zealnd first home owner is now 36 years of age, most people need 6 years to save a deposit, if they can keep pace.
Just returned from a subdivision on the Sunshine Coast, 15000 new homes being built, builders working all day, well till 12ish as it gets to hot. a sea of new homes under $360 Aus with a first home owners grant of $15,000 dollars.
The GST take by Aus Govt is about $45,000 on house and land packages, so seeding $15,000 to create Affordable Housing, Employment, Materials Handling, Genarally economic activity surrounding the catalyst of Residential Building. Oh and the economic return from PAYE etc.
Maybe its to big a task for our current political party, but then taking GST of a Banana is to dificult at present, thank goodness we dont have aspirations for a space programme.
MCNZ... well said.. not sure what the new scaffold rule is ..but I can imagine...
I'd say it is tooo big a task for our current crop of leaders...any change will come very slowly..and it will take a crisis ..of sorts.
This has been on the horizon ...and clearly visible as a problem ( housing shortage) for over 4 yrs now..
I actually thought they would do something...but I now realize that the things u touch on above are entrenched..... especially the regulatory/compliance/ beaureaucratic side of things... To fight for change would be like trying to push shit uphill...
Auckland, Auckland, Auckland - Some people do live in other parts of the country where this absolute madness is not happening. In fact its the opposite, where I live houses in the $500,000 plus bracket are, on average, selling for 10 percent below QV! And most of them would be by far and away superior than most of the rubbish being sold in Auckland for $700,000 plus.
More fools those who are mortgaging themselves up to the hilt and paying for "dead" money if they are not so-called investors. Wish those investors would start to help businesses in New Zealand then we would all be better off. Not going to happen while this madness prevails is it.
You cld be talking about the "real" New Zealand there scarfie. I want to know how many people in this country are actually "making" something that is worthwhile and not just sitting behind computers doing mindbogglingly unproductive "stuff". That could all be taken away from them in an instant. And they are all buying houses!
I remember years ago when I worked in the CBD of Wellington (mid-80's) and there were cranes in the skyline for miles - building office space upon office space, and I am not an economist or brain or anything like that - in fact was just a simple shorthand typist in those days. I kept asking people with more knowledge than I had "where are all the people going to come from to work in these offices"? Just a simple question. Well we know what happened, it all crashed and then those offices became "apartments" (Just look down The Terrace - rows upon rows of them). So now - question - where are all the people going to come from to fill the apartments up? Not in Auckland - Wellington.
Now I had better get back to work - I am still wanted at least and still typing fast (from home!)
Gareth - I live in South Wairarapa - lovely if you don't have to commute or find work. And its starting to happen that us baby-boomers who want to "downsize" are not going to get the prices we want for our houses because the poor "middle class" can't afford our houses. Except of course if you live in Auckland. So us oldies will have to learn to not be greedy and take the profit we have been offered - not what we want!!!
I could give you all the platitudes like we cldn't help being born when we were, and times were all good during our years; but don't lump us all as greedy, most of us just accept what we have and accept what life throws at us, good and bad. Most of all we are really good at coping.
What is the dreadful hardship that baby boomers are good at coping with?
All that free education, student allowances, free social services, health care, retirement age still at 65, making loads of money on property price inflation (unless being totally dense)?
Or is it the hardship of being bailed out of dopey investments like the sth island boomers who trusted all their cash to a geriatric guy who didnt keep any records?
And then when those boomers didnt get bailed out of their stupidity quickly enough - marched in the streets in protest.
Well done for coping, you poor delicate creatures !
Harrrrrrrrrrhahahahaaa....tell you what SK....the free ed came with lashings of violence by the thugs calling themselves 'teachers'. The time at uni was subsidised but for whom!...and the years at uni demanded finding work in the hols...and the time went by while others were earning fat wages stacking bricks and shearing ^&%$##% sheep. The health care reminds me of the 'murderhouse' dental butchery that went on and which left most boomers with a mouthful of shite and metal.
Not all marched in the streets SK...not the ones who received dosh without any paperwork!..and they were not all boomers.
Pension in a matter of months SK...pleased to know you will be funding my lifestyle...
Lazy and incompetent as well.. Most BB's I know are still working; me included and I'm 65 - I have skills that no one is teaching anymore (fast, accurate typist transcribing via the Internet) and I'm needed - my husband is nearly 70 and working (unpaid) doing things that no one else wants to do like hard work cleaning creeks out, cutting down trees, cutting firewood for others etc. And greedy - we are not. The fact is SK that we've simply lived through different times. Both of us were what is now deemed as poor when we were kids - me a State house kid and him a Railway house kid. Violins out and at the ready - we worked bloody hard for what we have, we've both been relatively well off, been through divorce, lost money on houses (property crash early 1990s) lost money on the sharemarket (1987); lost money through bad investments (bad advice given - naivity) no one has bailed us out and we are now "coping" very well thank you on the meagre interest we get from money in the bank - which is not much I have to say. Most of us are very independant and want to stay that way. We do not ask for handouts. But thanks for the pension I'm now getting.
Instead of being negative about things, maybe you should start protesting in the streets about the lack of help for young ones in finding jobs, and getting started in the housing market. I despair at the lack of insight, foresight from those at the top.
If you were what is deemed a 'poor kid' today - most sources report that you wouldnt have a state house - you would be living in a garage with a 3rd world respiratory disease and going to school with no lunch.
On this basis you got a top start - a far better start than poor kids today - and still complain about how hard it is to cope. Now u get a pension - thats cradle to grave social welfare!
Cheers,
SK.
In Naenae in the 50/60s there were kids living in just those situations. I can remember the teachers giving those kids food, and shoes, and sending them home becos of their "snotty noses". Just wasn't talked about that's all. They were in our street. Thank goodness I was born to the parents I had and yes you cld say thanks to them I got a top start. Never mind SK - we can't solve all the problems of the world. Cradle to the grave is what NZ expects and what Mr Key is still giving. Its unaffordable. But I was born when I was born. A very vintage year 1947! Oh and I'm not complaining about how hard it is to cope. Doing fine thank you very much.
Cheers and have a good Xmas.
V
I have a friend, who in 1987 owned a building in Queen St. One day, his cleaner comes up to him and asks to buy the building from him, for no less than $8M, this was before the crash. My friend, thinking with 99% certainty that his cleaner was full of it, thought nothing of it, as the cleaner wanted to settle on April the 1st. April the 1st comes along, the building is sold, next thing you know the cleaner is bankrupt. JP Morgan was right when he talked about the shoeshine boy. I've actually just now seen that one of my old cleaners is now a real estate agent.
A woman i work with just paid $900k+ for a 3.5 bdrm in MtAlbert . Her and her hubby had a $90k deposit. They think they're clever.
I feel like everybody is in the same party boat, and everyone knows it's called the SS Titanic but that no-one wants to be the party-pooper who points that out...
You need to add every dollar of interest paid, to the purchase price, to get the actual price paid for the house.
It is critical for the market to rise in real terms for a profit to be realized. I think we need to focus more on those buying at these levels than those selling as the seller is history, the money is made, but the buyer is looking to the future.
Normally a punt this large and long term would require stable economic conditions to assess the future risk involved, we don't have that at all, so the risk is magnified and unknown.
Cheers
NZ House prices increasing, dollar increasing, unemployment increasing, deficit increasing.
And we are stil in Global Financial Crunch mode?
The puzzling thing with property is that we are one of the most under populated countries in the OECD and the land itself is unique and exclusive to NZ? Yet we compete to borrow maximum and pay interest overseas for something we have plenty of?
Speculation in the residential market needs to balanced with the communities more important need for affordable homes.
The Government need to act urgently to stop this unnecessary illogical economic situation that is costing us heavily and redirect wealth back into productive NZ investments that bring foreign wealth and employment back into NZ.
Haw haw haw from the beautiful golden sands of Kaanapali beach ...how are all you mortgage serfs doing in the fine city of cheap japanese imported cars and over priced real estate ....haw haw
more wonderful news from the "shakee isles" especially Awklund, with all these high house prices means more interest payments to the banks and more mullah for moi !!
a big thank you to my chinese friends et al for pumping up those prices... higher prices means more mortgage interest repayments ... ahhhh the wonderful world of fractional reserve banking ....maaaarvellous haw haw
haw haw I'm just rolling in green clover ...green green green of the greenbacks ...just tickled elephant pink pound notes by the news.
It's just like a runaway "cash flow" train ...Orient Express of course, not the Papakura to Britomart 7.53am service ....haw haw
Just about to polish the driver and head out for 18 holes of the great game on the most bewteeful course in the werld
Toodle pip for now and get back to work, so you can generate that COLD HARD CASH for those mortgage payments for MOI !! ....don't mind whether its rent or mortgage interest payments, it will all end up in the bank vaults and to moi ! IT'S ALL GREEN TO ME !! ....haw haw
haw haw ....when were you last in Maui SK ? you probably went on a travel agents special and were duped into staying in the staff quarters of a 6 star resort .... haw haw
by the way SK et al a big thank you to you and your ilk for collecting ones rents and transferring it to the beautiful banks coffers ...more green in ones back pocket....what does one do with all this money..... A BIG haw haw to that !!
It's good to hear that the old boys are represented on this site by the wit of the imitable GBH and the manners and sportmanship of Lord Christov .....cin cin ol chaps and it will be good to catch up for a single malt on thine hallowed marbled floors of the Northern Club ......merry Christmas to all and may Santa bless you with greater cash flow for greater mortgages !! ....haw haw
With the high property prices in Auckland we could offer Japanese style sleeping pods (high density) and reduce section sizes to 200 m2. Other option is 1 bedroom houses to be affordable. So a family of 4 can fit two in the bedroom and the other two in the lounge.
Average house value - Top 18 as at 10/12/12:
1 Herne Bay $1,913,333
2 St Marys Bay $1,566,889
3 Parnell $1,295,333
4 Epsom $1,178,833
5 Stanley Point $1,146,611
6 Remuera $1,139,389
7 Takapuna $1,125,278
8 Ponsonby $1,095,000
9 Westmere $1,063,722
10 Mission Bay $1,062,667
11 Devonport $1,042,333
12 Freemans Bay $1,008,389
13 Mt Eden $1,001,667
14 Cambells Bay $994,994
15 St Heliers $963,889
16 Kohimarama $956,000
17 Grey Lynn $934,444
18 Castor Bay $923,889
SK ,as QV say this morning house prices are nearly catching up to 2007 levels in real terms when you take inflation since 2007 into account. And that does not even take into account the interest and other costs many have paid out. Wow what a fantastic investment property has been. As I have always said people should have sold in 2007/2008. I did and have done better than just underscoring inflation to date. SK and his mates are only marking time at the best. You need what has happened of late. You had better pray it continues as inflation does not go away.
Not a response as always. You have to admit QV know more than you SK and Big Daddy. Nice to see some reality in the news about prices and not the usual tabloid sensationalism from the Herald. A dollar in 2007 bought more than it buys today. That is inflation SK. You sell a house and the proceeds buy less than they did in 2007. Your investments are still behind 2007 prices in real terms. When you take into account costs other than inflation such as interest rates maintenance and insurance it gets even worse. Rent does not even go close.
Just an observation:
I came back from Sydney a few days ago and went for a coffee in Parnell Road.
You could have fired a gun down that road without endangering anyone - no pedestrian traffic at all to speak of and plenty of empty commercial space. The contrast to (say) Parramatta was marked.
Yet Parnell is the third most expensive suburb here!
Has discretionary spending stopped in Auckland?.
not old SK. Middle aged and retired with no worries such as tenants and associated problems such as keeping the property in good nick when the return is so pathetic. You totally lose credibility when you say you know more than a government department. I can only presume you are claiming there is no such thing as inflation. It is just a figment of one's imagination.
middle aged is not old SK. You will get there one day. Middle aged, 30 years married with adult children and retired. It is great. Us baby boomers have certainly made it tougher for those following us and it is world wide. We had the ability to borrow cheap assets and sell them to younger generations who followed us. They in turn have a very expensive landlord called the bank. Luckily I can help my children and grandchildren because even though my childen are professional they will need help to get on the ladder as my generation have made it very hard for them to start.
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