National house sales down 31% and median price down 3.7% from December to January; Auckland sales down 31.4%, prices 6.5%. One economist put the Auckland sales fall at 6.1% seasonally adjusted.
The call yesterday was universal: the Auckland housing market had come off the boil.
However, the Real Estate Institute presented its usual array of regional graphs along with its market statistics for January – and, as usual, the Auckland graphs of sales & median prices for the last 5 years show a V groove every January.
To the naked eye, those V grooves look about the same every year. I abandoned Statistics NZ seasonal adjustments years ago after hearing at a seminar that they had trouble with Easter, which, as we all know, wanders about. But if sales & prices don’t pick up over the next 2 months, which are normally 2 of the busiest of the year, maybe then a downturn can be called. Even if Easter messes with the numbers at the end of March.
The second influence on the median price is shown through sales price brackets. In January a year ago and this January, the Real Estate Institute’s bottom 2 brackets nationally (the brackets aren’t shown regionally) had almost exactly the same sales – under $400,000 down by 3 to 2187, $4-600,000 down by 2 to 1310. The top 2 categories both jumped – $600,000-1 million up 149 to 1128, $1 million-plus up 63 to 423.
The bottom category’s share of sales has been in steady decline, unsurprisingly given the weight of the overheated Auckland market on national statistics. Back in January 2013, the under-$400,000 bracket contributed 55.9% of sales nationally, $1 million-plus just 3.4%.
That shows a drop of 12.6 percentage points in 3 years for the bottom bracket, and a 5-point gain for the top bracket. Although house trading doesn’t feature prominently in the CPI (consumers price index) because it’s not regarded as a consumer activity, a lot of the shift in price brackets can be attributed to housing sector inflation.
But getting deflation into the sector is not so easy. Homeowners don’t choose to sell at a loss, but might do so if an economic downturn persists.
Institute finds various reasons for Auckland drop
Real Estate Institute chief executive Colleen Milne said the average drop in sales volume for January had been close to 20%, and in median price 3%, nationally over the last 10 years.
“Auckland continues to show declining sales numbers. However, the reasons are many & varied, including an increasing large group of potential sellers who are unable to find suitable new properties – a reflection of the very tight listings position in Auckland and increasingly tight listings across the rest of the country. The market in Wellington appears to have taken a pause in January, with a decline in sales volume & median sale price.”
January house sales nationally were up 4.3% on a year earlier by 31% down from December at 5048. The national median price, $448,000, was up $22,000 (5.2%) on a year earlier and down 37% from December. The medians hit records in Hawke’s Bay & Taranaki.
Ms Milne said the number of dwellings sold by auction rose by 45% in the last 12 months to 20,065, representing 22.1% of all sales. 418 homes were sold by auction nationally in January, representing 8.3% of all sales and 5 fewer than in January 2015. Auckland’s dominance of auction sales has dropped, from 78% a year ago to 52%. Auctions’ share of sales in Waikato & the Bay of Plenty rose from 9.2% to 28.5%.
The breakdown of sales in price brackets and their share of the market in January 2016 (January 2015 in brackets):
$1 million-plus, 423 (360), 8.4% (7.4%)
$600-999,999, 1128 (979), 22.3% (20.2%)
$400-599,999, 1310 (1312), 26.0% (27.1%)
Under $400,000, 2187 (2190), 43.3% (45.2%)
Last summer, median prices & sales dropped all round Auckland except on the Shore and in Rodney from December to January. The regional change was a 2.7% dip in price for the month, but a 16% gain over the year, and a 35.5% fall in sales volume over the month (by nearly 1000 sales down to 1764), but a 1.6% gain over the year.
This summer, Rodney was alone with a rise in the median from December to January, but sales fell everywhere. Regionally, the median was up 9.1% on a year ago but down 6.5% from December, and sales were down 13.5% from a year ago and 31.4% below December.
Around the region on the old boundaries, January 2016 median & sales with December & January 2015 in brackets:
Rodney, $793,750 ($745,000, $657,500), 130 (191, 126)
North Shore, $870,000 ($910,000, $838,000), 280 (413, 313)
Waitakere, $685,000 ($717,500), $589,000), 217 (302, 257)
Auckland City, $790,000 ($867,000, $749,250), 406 (700, 470)
Manukau, $700,000 ($760,000, $620,000), 273 (365, 376)
Region, $720,000 $770,000, $660,000), 1526 (2225, 1764).
Attribution: Institute release, statistics.