Autumn is here at last, as this photo by Open2view South Taranaki’s Michelle Hoffmans shows.
Though our days are getting cooler, and my ability to type thus severely hampered, it’s still sunny days in the real estate market.
I will write this quickly, operating on the theory that fast typing will create friction, in turn warming up my cold dead hands.
Realestate.co.nz’s NZ Property Report for March shows the median asking price has moved just 0.3 percent in a month, while listings are down 3%.
The changes are more pronounced when comparing March with the same time in 2012. The average asking price is up 4% over this period while listings are down by the same percentage. Inventory, at 27 weeks, is 20% lower than the year before. In short – good news for sellers, not so great for buyers.
Quotable Value’s statistics further back this up. Auckland house prices are up by 11% over last April. Southside of Bombay, Christchurch is up 7.8% while Hamilton and New Plymouth recorded rises of more than 4%. Only Whangarei saw a decline, with house prices there down 1.8%.
Perhaps the most important trend to note from QV’s findings is this: some buyers are getting a little sick and tired of the high prices. Research Director Jonno Ingerson reports that the rate of price increases has slowed in Auckland, Hamilton, Christchurch and Dunedin.
With prices being high, buyers are increasingly considering telling sellers where to go. Many prospective sellers are also holding on to their homes for now as the Auckland Council’s draft unitary plan threatens to play merry havoc with house values.
The local cattle populace don’t look too impressed with the changing of the leaves. Check out more of Nalene Morton’s photos of this Levin property here.
QV also came out last week with another set of very interesting data. Those asking prices mentioned earlier? In most cases, forget about it.
Going through last year’s sales data, QV found that just 17.2% of sales were for above the seller’s asking price. A mere 6.2% sold for exactly what was asked, leaving a whopping 76.2% of houses selling for less than what the seller wanted.
Take the average asking price in Auckland of $610,628 last month. On the North Shore you can expect to get pretty close to the asking price, unless you’re one of the lucky 30% who sell for above that. In Papakura, on the other hand, prepare to settle for around 4.5% less. The entire article and accompanying tables are well worth a read.
Meanwhile, as this was being written, the Real Estate Institute of New Zealand released its own March figures.
What stuck out most were the announcements that the median house price hit $400,000 for the first time ever, and that March saw the highest number of houses sold in a month – 8128 – since May 2007, at the peak of the last housing boom. Auckland and Canterbury/Westland reached new records of $562,000 and $359,000 respectively.
What stuck out a close second were the comments by Chief Executive Helen O’Sullivan that sounded like a not-so-subtle message to the Reserve Bank. With Governor Wheeler and Bill English looking for tools to curb house prices, O’Sullivan was at pains to point out the stark differences between Auckland/Canterbury and the rest of New Zealand:
“There’s a real danger that the Auckland housing market is mistaken for the New Zealand housing market, and that regulatory decisions will be made on the assumption that conditions in Auckland and Canterbury are replicated across the rest of the country.”
“Supply shortages in Auckland and Christchurch continue to be the main factor in those two markets, resulting in double digit price increases and new record prices, while the number of days to sell reaches near record lows. Across the rest of the country while activity is picking up, price gains are far more modest. To illustrate this, five regions, representing 24% of sales in March recorded annual price increases of less than 1.0%.”
Guess what? She’s right. It would be silly to assume that what’s happening in Auckland and Canterbury is also going on elsewhere. It is, as we’ve always said, a two-speed real estate market. Blunt tools like loan to value ratios that might work in one area could do real damage to the property market elsewhere.
So with so much data and so many differing opinions, how can you decide what to do? Here’s one more link that might ease your real estate headache a little.
Longtime property commentator Alistair Helm of Properazzi has developed the Property Dashboard, which takes all that data from Realestate.co.nz and REINZ, decides whether it’s a buyer’s or seller’s market, and presents it in a pretty, simple and pretty simple manner.
Best of all, Alistair calculates it by region as well as nationally. There’s no doubt Auckland skews the national data so it’s important to see how different things are in, for example, Gisborne, where the needle points all the way to the other side.
What the Dashboard, and all those other reports prove, is the property market isn’t black and white by any stretch. Look closely and you’ll find shades of grey (and perhaps red, and yellow, and brown).
The big question is: if the Auckland market is in need of correction, as some worry about, will it do so sharply, or will it just float down gently in a tequisous fashion?