New Zealand housing market saw a sales surge at end of 2014

Last year ended with a sales surge in the New Zealand residential real estate market with transactions up 24.2 in December compared with the same month in 2013.

It was the strongest December sales since 2006 and the second strongest December on record, according to the data from the Real Estate Institute of New Zealand (REINZ).

The index also shows that the national median price at $450,000, is up $23,000 on December 2013 but down $5,750 on November 2014. However, the Auckland median price reached a new record of $678,000.

Overall there has been an annual increase in the national median price of 5.4% over 2014 compared with 9.8% over the 2013 and year on year sales were down 7% on the number sold in 2013.

‘The data for December shows very strong sales growth compared to 12 months ago and a much higher level of sales that we would normally expect for the final month of the year,’ said REINZ chief executive Helen O’Sullivan.

‘The effect has been seen right across the country, with a number of regions seeing further increases in sales in December after a strong November. The normal December slow down hasn’t really happened in 2014,’ she explained.

However, she pointed out that apart from Auckland, median prices across the country have moderated somewhat. For the year ended December, Auckland’s median price rose by 13%, but the national median rose by only 5.4%. Even Canterbury, which has seen strong price growth during 2014 has seen its rate of price increase pull back to under 2% for the 12 months to December 2014.

‘The real estate market remains split between Auckland, with strong demand and price growth, and the rest of the country. While a number of regions are experiencing listing shortages the situation in Auckland is acute, with less than three months’ supply available and demand continuing to be robust,’ she said.

‘Vendors are simply not coming forward in large enough numbers to meet the demand, despite the strong price rises seen in Auckland over the past three years,’ she added.

A breakdown of the data shows that four regions recorded an increase in sales volume compared to November with Hawkes Bay recording the largest percentage increase of 7.2%, followed by Nelson/Marlborough with 6.8% and Northland with 4.2%.

All regions recorded an increase in sales volume compared to December 2013 with Manawatu/Wanganui recording the largest increase of 39.7%, followed by
Waikato/Bay of Plenty with an increase of 34.8% and Wellington with an increase of 32.5%.

The national median house price declined $5,750 or 1.3% to $450,000 compared to November. Compared to December 2013 the national median house price increased by $23,000 or 5.4%, with six regions recording an increase.

On a seasonally adjusted basis the national median house price rose 0.2% compared with November and 4.7% compared to December 2013. Taking total volumes and prices into account, Auckland accounted for 98% of the increase in the median price between December 2014 and December 2013, with the remainder of the country accounting for just 2% of the increase in the median price.

Auckland recorded the largest percentage increase in median price compared to December 2013, with a 13% increase, followed by Wellington with a 3.8% increase and Waikato/Bay of Plenty with a 2.7% increase. Compared to November, Auckland recorded the largest percentage increase in median price, up 1.2%, followed by Taranaki with a 0.6% increase.

The REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can impact on the median price, is 6% higher than December 2013, at 4,076.6. The Auckland Index has risen 13.5% compared to December 2013, with the Christchurch Index up 3.7% and the Wellington Index up 1.6%.

Properties took a median of 32 days to sell in December, the same number as in December 2013, and two fewer than November.

Four regions saw an improvement in the number of days to sell compared to December 2013 with Manawatu/Wanganui recording an improvement of four days, Taranaki an improvement of three days, and Auckland and Waikato/Bay of Plenty an improvement of one day each.

For the month of December, Auckland, Canterbury/Westland and Otago recorded the shortest days to sell at 29 days, followed by Wellington at 35 days. Northland recorded the longest number of days to sell at 59 days, followed by Central Otago Lakes at 53 days and Hawkes Bay at 48 days.

Over the past 10 years the median days to sell for the month of November has averaged 34 days across New Zealand.