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Big change in 2 price brackets’ shares of housing market

The 2 most striking factors in the Real Estate Institute’s monthly residential statistics, out on Wednesday, are that the national median has continued to rise despite a slide in Auckland, and despite a switch between shares of the 2 middle price brackets.

The gulf between Auckland & ex-Auckland medians is still wide – $410,000, compared to $473,000 a year ago.

When you look at the 4 price brackets the institute uses, you’ll see both the top & bottom shares of the overall market have shrunk, but the middle brackets have swapped places – the share of the $750,000-$1 million bracket dropped about 11% while the share of the bracket below it, $500-750,000, rose 15%.

That conforms to indications in auctionrooms that vendors are having to cut their reserve to attract any interest, and likely cut again to achieve a deal. Auction transactions are generally taking far longer while those negotiations take place.

Median house price in October (October 2016 in brackets):

National: $530,000 ($510,000), up 3.9%
National excluding Auckland: $440,000 ($405,500), up 8.5%
Auckland: $850,000 ($878,500), down 3.2%

The breakdown of sales in price brackets and their share of the market in October 2017 & October 2016 (in brackets):

$1 million-plus: 726 (974), 12.8% (14.4%)
$750-999,999: 773 (1643), 13.6% (24.3%)
$500-749,999: 1567 (850), 27.5% (12.6%)
Under $500,000: 2623 (3292), 46.1% (48.7%)
All properties sold: 5689 (6759), down 15.8%

Compare those October market shares with those in September, this year & last (2016 in brackets):

$1 million-plus: 715 (1020), 13.2% (13.9%)
$750-999,999: 749 (967), 13.8% (13.2%)
$500-749,999: 1419 (1855), 26.1% (25.2%)
Under $500,000: 2545 (3510), 46.9% (47.7%)
All sales: 5428 (7352), down 26.2%.

The Real Estate Institute said median prices rose in 14 of its 16 regions from October last year, lifting the median outside Auckland to a record $440,000. The falls were in Auckland & Nelson. The big contributors to the rise were:

Waikato: up 9.9% to $500,000
Manawatu/Wanganui: up 11.5% to $290,000
Canterbury: up 4.7% to $450,000
Otago: up 14.4% to $412,000.

The institute said Auckland’s median price fall was its biggest since December 2010, while Nelson’s 6.8% fall to $447,500 was its biggest drop since April 2012.

Institute chief executive Bindi Norwell said the Auckland fall was largely the result of a large number of apartments being sold on the isthmus (the old Auckland City – the institute still hasn’t updated its boundaries), which took the median price down for the entire region.

On those old boundaries, Auckland City’s median fell 17% to $850,000, the lowest it’s been for 16 months, Franklin rose 16% to $737,000 and North Shore City remained New Zealand’s only million-dollar plus city.

“Looking at the institute’s house price index for the legacy Auckland City, it only decreased 0.8% year-on-year, whereas the median for the same period fell by 17%, highlighting that the drop in median price is not as dramatic as a first glance would suggest. This is because the index considers the mix & value of the property sold, not just the sales price.”

Auctions

The number of properties sold by auction continued to decline – 869 in October, down 42% from a year ago but up 4% from September. Auctions now represent 15% of all sales nationally.

In Auckland, where the proportion of sales by auction has traditionally been higher, 464 sales (28%) were by auction, down 44% from a year ago but up 8% from September.

Inventory

The number of properties available for sale nationally increased by 4% (from 23,385 to 24,307) compared to 12 months ago, and by 17% in Auckland (from 7214 to 8465).

Attribution: Real Estate Institute.

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Quietest September in 6 years for house sales

House sales nationally fell to their lowest September level in 6 years, from 7352 a year ago to 5428, the Real Estate Institute said yesterday.

Auckland sales fell 31.5% from a year ago but it wasn’t the quietest region – Southland sales fell 34% and Tasman 37%.

However, median sale prices rose 1.2% nationally, and 5.7% nationally excluding Auckland. Auckland’s median was unchanged from a year ago at $845,000, and rose by $10,000 (1.2%) from August.

The Real Estate Institute’s house price index, which gauges sale prices against council valuations, rose 0.7% in September to a new high of 2699 points.

The auction decline continued, down 54.5% from a year ago nationally, and down to 14.9% of all sales. In Auckland, auction sales fell 57% from a year ago and represented 26.5% of all sales.

The breakdown of sales in price brackets and their share of the market in September 2017 & September 2016:

$1 million-plus: 715 (1020), 13.2% (13.9%)
$750-999,999: 749 (967), 13.8% (13.2%)
$500-749,999: 1419 (1855), 26.1% (25.2%)
Under $500,000: 2545 (3510), 46.9% (47.7%)
All sales: 5428 (7352), down 26.2%.

The number of properties available for sale nationally fell 2.6% to 21,727 (22,311), but rose 14% in Auckland to 7429 (6513). Excluding Auckland, the number of properties for sale fell 9.5% to 14,298 (15,798).

Attribution: Real Estate Institute release.

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House sale statistics wander around

The nearest thing to a trend in house sales is that the under-$500,000 price bracket remains a few points below 50%, but even that’s wobbled a couple of times over the last year.

The Real Estate Institute’s statistics showed the median sale price in August around the country compared to both August last year & July this year, but down in Auckland compared to a year ago.

Sales were down compared to a year ago but up compared to July.

The bottom price bracket used to be under $400,000 and its share of the market was declining rapidly. But the bracket marker was lifted to $500,000 early this year and, although it’s still falling, it’s in the mid-40% region.

The institute view

Real Institute chief executive Bindi Norwell said: “Banks’ lending criteria & loan:value ratios (LVRs) are still impacting first-homebuyers & investors. If you looked at the number of properties sold, without looking at the bigger picture, one might assume that the market was showing significant signs of slowing. However, as prices are holding up, and even increasing, then it suggests that people may be holding off from selling their property unless it’s absolutely necessary.”

Median house price this August compared to July 2017 & August 2016 (in brackets):
National: $530,000 ($518,000, $490,000), up 2.3% in month, 8.2% in year
National excluding Auckland: $428,000 ($417,500, $386,000), up 2.5% in month, 10.9% in year
Auckland: $840,000 ($830,000, $850,000), up 1.2% in month, down 1.2% in year

Sales by auction nationally fell 55% from a year ago to 799, representing 14% of all sales. In Auckland, auction sales fell 61% to 418, representing 23% of all sales.

Sales nationally fell from a year ago in all price brackets, but were up from July in all but the $500-750,000 bracket. The breakdown of sales in price brackets and their share of the market in August 2017 & August 2016:

$1 million-plus: 787 (964), down 18%; 13.3% (13.1%) of all sales
$750-999,999: 790 (941), down 16%; 13.4% (12.8%) of all sales
$500-749,999: 1614 (1717), down 6%; 27.4% (23.3%) of all sales
Under $500,000: 2705 (3746), down 38%; 45.9% (50.8%) of all sales
All sales: 5896 (7368), down 20%.

In last month’s item on the housing figures I managed to present you with an Auckland sales graph twice, omitting the price brackets. Here’s that breakdown of sales in price brackets and their share of the market in July 2017 & July 2016:

$1 million-plus: 708 (1002), 12.9% (13.8%)
$750,000-999,999: 674 (925), 12.3% (12.8%)
$500,000-749,999: 1478 (1741), 27.0% (24.0%)
Under $500,000: 2615 (3583), 47.8% (49.4%)
All properties sold: 5475 (7251).

The institute’s house price index, which measures the changing value of property in the market, showed a 0.5% increase nationally. Excluding Auckland, it rose 7.0%. The Auckland index fell 2.9%.

Housing stock available:
Nationally: 21,555 (21,462), down 0.4%
National excluding Auckland: 15,389 (13,825), down 10.2%
Auckland: 7731 (6073), up 27.3%

The Auckland view

On the Auckland market Ms Norwell said: “The Auckland market is stable but improving, with house prices in Auckland increasing $10,000 from July, with much of this activity being driven by school zones, age of homes & location. LVRs & the banks are still impacting the market & first-homebuyers, leading to a reduction in investors in the market. Similarly, clients are still cautious as the political parties continue to announce their policies, but post-election the market is expected to lift.

“Compared to August 2016, the median price decreased $10,000 (-1%). However, most of the territorial authorities [on the old boundaries] within the region saw increases in their median price over the same time period, with Franklin District leading the way with a 9% increase. It was Manukau City & Waitakere City only that saw decreases in their median price since August 2016, the latter most significant at -5%.

“Compared to July 2017, the overall region median increased 1%. The performance of the territorial authorities was largely positive, with only Manukau City experiencing a decrease (-3%).

“Sales volume in the Auckland region increased 7% compared to July, with large boosts in sales numbers in Manukau & Waitakere (24% & 15% respectively). Compared to August 2016, sales fell 22% with volume decreasing in all territorial authorities, most notably in Rodney (-30%), North Shore (-28%) & Auckland City (-26%).”

Attribution: Institute release.

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Fall in house sales prompts call to review LVR restrictions

As the number of house sales fell in Auckland by 30.6% from a year ago, and nationally by 24.5%, the Real Estate Institute called on Friday for the Reserve Bank’s loan:value ratio (LVR) restrictions to be reviewed.

Institute chief executive Bindi Norwell said: “The LVR restrictions have done their job of slowing the market, but now it seems they are acting as a handbrake, which is why the institute is calling for LVRs to be reviewed for first-time buyers.”

However, Ms Norwell also offered a number of other reasons for the slowdown in sales: “When you throw in an election, winter, school holidays and one of the wettest Julys on record, it’s little wonder the number of properties sold last month fell so significantly.”

What the constraints haven’t done is bring about a substantial cut in price.

Ms Norwell: “While the median house price for Auckland has fallen slightly, the housing shortage coupled with the increased population growth means the City of Sails is likely to be protected from significant price decreases in the short term.”

House sales nationally were well down in July compared to July last year: “A key reason for this is that the 2 biggest hurdles to purchasing a house right now are access to finance as the banks continue to tighten their lending criteria, and LVR restrictions. This creates an intimidating barrier to entry to the real estate market, particularly for those saving for their first home. No matter where we are in the country, agents tell us that there are a good number of buyers out there, but that these 2 issues are impacting both investors & first-time buyers alike.”

The institute’s house price index rose nationally by 1.2% in July, and by 7.5% excluding Auckland. In Auckland, the index fell 2.1%.

The median price rose nationally by 3.4%, to $518,000 ($501,000 in July 2016), and by 6.1% excluding Auckland to $415,838. In Auckland, the median fell 1.2% to $830,000 ($840,000). Meanwhile, in 4 regions, the median hit new records – Northland up 23% to $455,000, Hawke’s Bay up 25.8% to $400,000, Nelson up 20.2% to $493,000 and Otago up 15.3% to $400,000.

The number of properties sold by auction continued to decline, the 767 sales nationally in July representing 14% of all sales, down from 23% a year ago.

Sales for over $1 million fell 29% from a year ago to 1002 (708 in July 2016), representing 13% of all sales last month. Sales for under $500,000 fell 27% to 3583 (2615), representing 48% of all home sales last month.

The number of properties available for sale nationally rose by 1441 (7%), and rose in Auckland by 2648 (49%). Excluding Auckland, the number of properties for sale fell by 1207 (8%).

The breakdown of sales in price brackets and their share of the market in July 2017 & July 2016:

$1 million-plus: 708 (1002), 12.9% (13.8%)
$750,000-999,999: 674 (925), 12.3% (12.8%)
$500,000-749,999: 1478 (1741), 27.0% (24.0%)
Under $500,000: 2615 (3583), 47.8% (49.4%)
All properties sold: 5475 (7251).

Attribution: Real Estate Institute release.

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Institute figures show Auckland housing market quiet, rest of country bubbling

Real Estate Institute statistics out yesterday showed Auckland’s residential median sale price was still rising, but only by 2.5%/year, whereas the rest of the country was up 11.4%.

The divergence in price between Auckland & the rest of the country remains wide. Auckland’s median in June was $850,500 ($830,000 in June 2016), while the median for the rest of the country was $431,000 ($387,000).

The institute’s house price index showed Auckland falling 0.6% over the year, but the rest of the country rising 9.2%. The national movement for the year was up 2.8%.

Auckland sales volumes fell 33.2% over the last year, and nationally sales fell 24.7%.

Real Estate Institute chief executive Bindi Norwell said yesterday: “We know that it’s winter and the election is just 2 months away now, which typically impacts the number of properties sold in the market. The number of properties sold across the country is the lowest we’ve seen in the month of June for 3 years – particularly in the $500,000-&-under property price bracket. This slowdown in transactional activity, but stabilising price trend, highlights the underlying dynamics between housing demand & housing supply, with population growth continuing to rise faster than building consents & dwelling supply.”

“The June figures show us that a number of things are happening across the residential real estate market – inventory levels are impacting pricing, loan:value ratios are having a significant impact in terms of buyers’ ability to purchase properties (particularly for first-time buyers) and that the major trading banks are being more cautious with their approach to lending, particularly their view of how highly leveraged Kiwis are when it comes to properties.

“Talk of a decline in prices may be premature, with the seasonally adjusted median price trends still rising across many regions in New Zealand. The Auckland market is the most mature in terms of the property cycle. However, at worst, prices in the Auckland region are steady at present. The data also shows an emerging trend of section sales in Auckland occurring more quickly than dwelling sales, highlighting that demand for sections is still rising in Auckland while demand for dwellings is easing.

“With the looming election, Auckland prices are showing all the signs of stabilising that we would normally expect, and we anticipate this being a similar trend over the coming months until the election is over.”

The number of properties available for sale rose by 1895 in June compared to 12 months ago, although the number of properties for sale in the Auckland region has increased by 3097 (57%).  Excluding Auckland, the number of properties for sale fell by 1203 (7.4%).

The number of properties sold by auction continued to decline, down to 828 auction sales in June (14% of all sales, from 13% in May, 24% in June 2016).

Auckland median prices & volumes on old council boundaries:

Price brackets:

Attribution: Real Estate Institute release.

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Institute says Auckland house prices still up, sales down

The Real Estate Institute said in its monthly statistics out last week that its house price index for Auckland was up 1.8% on a year ago but down 1% in the last 3 months.

[The institute released its figures on Wednesday.]

The median price for the region was up 5% ($41,000) over the year to $865,000 and up 13% on the isthmus, 12% in Manukau, 8% in Rodney (on old council boundaries).

Sales were down 27.5% compared to a year ago, but in Papakura that was 9%, and in Franklin and on the North Shore it was 15%.

The institute said the average number of days to sell in Auckland had eased in May – it’s extended from 35 days in April and 32 days a year ago to 40 days, compared to a May 10-year average of 36 days. Inventory was up from 13 weeks to 22 weeks from a year ago.

Nationally, the median house price rose 6.7% ($34,000) from a year ago to $540,100 and the median hit record highs in 4 regions – Northland $450,000, Manawatu/Wanganui $269,000, Nelson/Marlborough $483,250 & Southland $238,000.

Sales nationally fell 18.4%.

The number of properties for sale in Auckland increased by 2814 (47%) on a year ago, but outside Auckland the number fell by 2683 (14%).

Attribution: Institute release.

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Auckland house price index still up 5.2% over year

The Real Estate Institute said today the median house sale price for the Auckland region rose 3% ($24,500) in April compared to April 2016 to $854,500. Prices rose 9% in eastern & southern suburbs, 5% in the centre.

The Auckland median fell 5.6% from March to April, down from $905,000 to $854,500.

The institute’s national house price index rose 7.8% from a year ago to 2690, nationally excluding it rose 12.8% to 2386, and in Auckland it rose 5.2% to 2901.

The 5845 unconditional residential sales in April were down 32% compared to March and down 31% compared to April 2016.

The institute has changed a number of features of its monthly reports. In short, it’s aligned its regions to those used by Statistics NZ and it’s added more categories to its breakdown of price brackets (see the chart, which previously had 3 lines).

The institute is also placing more emphasis on seasonal adjustment. The concept of seasonal adjustment is good, but as longtime readers of this website will know, I lost faith in Statistics NZ’s ability to achieve reliable seasonal adjustment years ago when it had trouble with Easter moving to March that year – a fairly well flagged event you might have thought, but nonetheless difficult to calculate, apparently.

When I deal with real estate statistics, I don’t trust anything that can be manipulated, and seasonal adjustment is, in the end, a subjective manipulation. So I’ll be leaving those parts of the statistics out of my stories.

Attribution: Institute release.

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Auckland house median slips

The Real Estate Institute said today the median house sale price in Auckland in February, $800,000, was down $5000 from January but up $50,000 on the median a year ago.

Nationally, the equation was up on both previous periods – up $5000 on January and up $45,000 on a year ago.

The $1 million-plus price bracket regained some of the market share it lost in January. After falling from 13% in December to 10.6% in January, the top bracket was back up to 11.3% of the market in February.

The breakdown of sales in price brackets and their share of the market in February 2017 & February 2016:

$1 million-plus, 708 (675), 11.3% (9.3%)
$600,000-999,999, 1639 (1656), 26.2% (22.7%)
$400,000-599,999, 1632 (1934), 26.1% (26.5%)
Under $400,000, 2247 (3026), 36.4% (41.5%)

Around the region on the old boundaries, February 2017 median & sales with January 2017 & February 2016 in brackets:

Rodney, $832,500 ($897,500, $760,000), 148 (112, 163)
North Shore, $1,013,000 ($965,000, $940,000), 296 (182, 372)
Waitakere, $805,000 ($761,500, $683,000), 200 (170, 289)
Auckland City, $891,000 ($845,500, $825,000), 464 (416, 549)
Manukau, $800,000 ($815,000, $749,500), 273 (193, 320)
Auckland region, $800,000 ($805,000, $750,000), 1661 (1247, 1936)
NZ, $495,000 ($490,000, $450,000), 6253 (4307, 7291)

Attribution: Institute release.

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Median sale price falls as fewer expensive homes sell

The median sale price for residential properties sold in Auckland dropped 4% ($35,000) from December to January, according to Real Estate Institute figures.

That happened as available stock in Auckland rose 17% compared to a year ago (1135 more properties on the market than in January 2016), but available stock outside Auckland fell 22% (by 4878 properties).

2 other market moves occurred in January – the trends of a rise in the $1 million-plus share of the market and decline in the under-$400,000 share were turned on their heads, at least briefly.

As prices overall have risen, the bottom market bracket’s share has steadily declined – from about 45% in mid-2014 to 34% in December. But, in January, that share climbed to 37.4%.

The $1 million-plus share of the market was in single figures in 2014, but climbing, and was 13% in December. But in January it dropped to 10.6%.

The Real Estate Institute said Auckland agents had 5.5 weeks’ more inventory than they had a year ago, rising to 16.6 weeks’.

280 homes were sold by auction nationally in January, representing 7% of all sales, down by 138 (33%) compared to January 2016.

The breakdown of sales in price brackets and their share of the market in January 2017 & January 2016:

$1 million-plus, 456 (423), 10.6% (8.4%)
$600-999,999, 1135 (1128), 26.4% (22.3%)
$400-599,999, 1105 (1310), 25.7% (26.0%)
Under $400,000, 1611 (2187), 37.4% (43.3)

Around the region on the old boundaries, January 2017 median & sales with December & January 2016 in brackets:

Rodney, $897,500 ($841,750, $793,750), 112 (160, 130)
North Shore, $965,000 ($1,038,500, $870,000), 182 (354, 280)
Waitakere, $761,500 ($760,000, $685,000), 170 (268, 217)
Auckland City, $845,500 ($978,000, $790,000), 416 (558, 406)
Manukau, $815,000 ($820,000, $700,000), 193 (325, 273)
Auckland region, $805,000 ($840,000 $720,000), 1247 (1873, 1526)
NZ, $490,000 ($516,000, $448,000), 4307 (6533, 5048)

Attribution: Institute release.

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Median Auckland house prices up over year, down from November

Median sale prices for houses in Auckland in December were all up on a year ago, and all down from November. Volumes were all down compared to both November 2016 & December 2015.

The Real Estate Institute said today Auckland’s median house sale price rose $70,000 (9.1%) to $840,000 compared to December 2015 – up 13% in Rodney, 14.1% on the North Shore, 12.8% on the isthmus and 7.9% in Manukau.

But it was down 1.4% from $851,944 in November – by 2.1% in Rodney, 6% on the Shore, 2.6% in Waitakere, 2.2% on the isthmus, 3% in Manukau.

Heaviest hit in the decline of sales was the isthmus, down 20.3% from a year ago, and down 29.4% from November to December. Over the whole region, sales fell 15.8% from a year ago and 22% from November.

Institute chief executive Bindi Norwell said in the institute’s monthly release: “In Auckland, the long-term median price trend has been consistently rising, despite a slight easing compared to November 2016. The combination of fundamental factors, such as strong underlying population growth and a lack of supply in the market to meet Auckland’s growing population, suggests that we may be unlikely to see much change to the upward trend in prices unless these fundamentals change.”

The national median sale price slipped from a record $520,000 in November to $516,000 in December, but 5 of the institute’s 12 regions hit new record median sale prices – Northland, Hawke’s Bay, Wellington, Otago & Southland.

Mrs Norwell said price growth was strong in Wellington, rising 22% ($100,000) in a year to a new record of $530,175, even though sales volume also rose from November to December.

The institute’s breakdown of price brackets showed $1 million-plus continued to take a greater share of the market nationally (13% in December). That shift has been fairly constant since New Zealand started to clamber out of the global financial crisis in 2011. In January 2012, 59.5% of house sales nationally were for under $400,000, and only 2.6% were for over $1 million.

The breakdown of sales in price brackets and their share of the market in December 2016 & December 2015:

$1 million-plus, 848 (755), 13.0% (10.3%)
$600-999,999, 1771 (1760), 27.1% (24.1%)
$400-599,999, 1687 (1867), 25.8% (25.5%)
Under $400,000, 2227 (2931), 34.1% (40.1%)

Around the region on the old boundaries, December 2016 median & sales with November 2016 & December 2015 in brackets. The percentage figures show the shift from November to December, and since December 2015, in median sale prices & sale volumes:

Rodney, $841,750 ($860,000, $745,000), 160 (190, 191); -2.1%, 13.0%; -15.8%, -16.2%
North Shore, $1,038,500 ($1,105,000, $910,000), 354 (405, 413); -6.0%, 14.1%; -12.6%, -14.3%
Waitakere, $760,000 ($780,500, $717,500), 268 (318, 302); -2.6%, 5.9%; -15.7%, -11.3%
Auckland City, $978,000 ($1,000,000, $867,000), 558 (790, 700); -2.2%, 12.8%; -29.4%, -20.3%
Manukau, $820,000 ($845,000, $760,000), 325 (397, 365); -3.0%, 7.9%; -18.1%, -11.0%
Auckland region, $840,000 ($851,944, $770,000), 1873 (2400, 2225); -1.4%, 9.1%; -22.0%, -15.8%
NZ, $516,000 ($520,000, $465,000), 6533 (7576, 7313)

Attribution: Institute release.

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