Turnover drops, prices stagnate: REINZ data

Fewer houses sold in May this year in every part of the country when compared with the same time the year before, the latest Real Estate Institute statistics show.

Monday, June 16th 2014, 12:00AM

by The Landlord

There were 6572 sales in May, up 15.9% from April but down 14.8% on May 2013.

The national median price was $430,000 in the month, up almost $40,000 on the same month the year before but down $2250 on April.

The year-on-year increase may have been skewed by a change in composition: The total number of sales was down 14.8% compared to May 2013, but the number of sales below $400,000 fell by 25%.

This follows a fall in sales below $400,000 of 31.6% between April 2013 and April 2014. REINZ said this could be indicative of fewer sales in the lower price brackets since the imposition of the LVR restrictions, which restrict the lending banks can do to borrowers with a deposit of less than 20%.

REINZ chief executive Helen O’Sullivan said: “The easing trend in the number of sales continues, with all regions recording a decline in sales volume in May compared to 12 months ago, and with this being the second month in a row that we’ve seen this. We would normally expect an increase in sales in May compared to April, however, after taking seasonal factors into account the increase was just 1.6%. This leads us to conclude that the drop in sales in April due to the combination of Easter and ANZAC Day has not created an offsetting increase in sales in May.”

May is traditionally the third-strongest month for sales, after March and November.

O'Sullivan said another factor driving the median up was the dominance of a couple of property markets.

“While the growth in the national median price is almost 10% compared to May 2013, the driving force for this increase are the Auckland and Canterbury/Westland regions. Together these two regions represent almost 53% of all sales, but contributed 76% of the uplift in the median price. Other regions such as Hawkes Bay, Manawatu/Wanganui, Wellington, Central Otago Lakes, Otago and Southland contributed just 6% of the uplift in the median price, despite representing almost 25% of the national sales total.”

Canterbury/Westland recorded the largest increase in median price compared to May 2013, with a 15.3% increase, followed by Auckland with a 10.6% increase and Central Otago Lakes with a 7.3% increase.

O'Sullivan said the market softening was also apparent in the number of days it was taking properties to sell.

Five regions had an increase of a week or more between April and May.

“At the national level the number of days to sell is about in line with the 10-year average, however, for a number of regions the result for May is noticeably higher than the 10-year average,” she said.

Dwellings took four days longer to sell in May compared to April at 38 days.

Compared to May 2013, the median number of days to sell was three days longer. Four regions saw an improvement in the number of days to sell between May 2013 and May 2014, with Central Otago Lakes recording the largest improvement of 30 days. Auckland saw its number of days to sell ease by three days.

For the month of May, Canterbury/Westland and Auckland recorded the shortest days to sell at 34 days, followed by Otago at 40 days, Wellington at 43 days and Taranaki at 44 days. Manawatu/Wanganui recorded the longest number of days to sell at 62 days, followed by Northland and Hawkes Bay with 61 days. Over the past 10 years the median days to sell for the month of May has averaged 39 days across New Zealand.

Compared to May 2013 all regions recorded a fall in sales volume, with Taranaki recording the largest fall of 34.8%, followed by Wellington with a fall of 19.9% and Otago with a fall of 19.3%.

The REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can impact on the median price, is 6.5% higher than May 2013, at 3925.1. The Auckland Index has risen 9.4% compared to May 2013, with the Christchurch Index up 9% and the Wellington Index up 1.1%.

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