Ten years ago in 2003 NZ was in many ways the same and yet so different. Helen Clark was PM with Bill English as leader of the opposition (replaced later in the year by Don Brash). Top film of the year was Whale Rider, whilst NZ population tipped past 4 million. It was a sorry year in Sport with Team NZ loosing 5-0 to Alinghi in the America's Cup and the All Blacks ending up loosing to Australia in the Semi-Final of the Rugby World Cup.
In the property market things were to say-the-least active. Sales of property were well on their way to a new all time record of over 120,000 in the year (2013 looks set to be around 81,000). As for prices; at the start of the year the average property sold for $203,550 (Stratified median price) and by the end of the year it would have cost $248,450 - a 22% increase. The largest single year increase in prices on record of the past 20 years.
2003 was the year when property prices really took off. A year earlier at the beginning of 2002 the stratified median price for a NZ house was $177,850. Over the next 5 years and 8 months prices would more than double, rising 131% to $379,075 by the end of the bull run in September 2007.
So the question remains - are we about to witness a similar stratospheric rise in house prices?
A good indication can be seen in a chart I have developed which tracks the cumulative rise by month for each year of property prices indexed based on the December price in the preceding year. This model provides a means to directly compare each year side-by-side.
The series of charts below track the Best and Worst years of the past 20 years as well as the Median and the current year to date. All charts utilise the REINZ Stratified Median Price Index thereby presenting data for NZ / Auckland / Wellington / Christchurch / The North Island excluding Auckland & Wellington and finally The South Island excluding Christchurch.
2013 is clearly not close to 2003 in relative growth rate although it is well ahead on the median. The month of August certainly saw a significant up-turn.
A very interesting picture in Auckland. 2013 is certainly shaping up to be similar to 2003, in fact August has taken the annual rise so far ahead of 2003; however Auckland saw the highest rise in 1994 not 2003 and so far 2013 is behind that rise.
It certainly looked to be a repeat of 2003 for Wellington in the early months of 2013 with monthly growth tracking almost exactly inline until May when prices came back and now are tracking exactly inline with the median. Interesting again for Wellington the best performing year was not 2003 but 1997.
In the Garden City 2013 is turning out nothing like 2003, which for the city was the best performing year of the past 20 years. After 8 months cumulative price rises in the city are exactly in line with the median rise.
Other North Island (exc Akl & Wtn)
Interesting that the remainder of the North Island regions saw the peak of property prices in 2005 rather than 2003. For this area of the country 2013 looks nothing like 2003 - another very average year of cumulative increase of less than 4% so far.
Other South Island (exc Chc)
Rather as with Christchurch the remainder of the South Island is no where near 2003 pace of property price appreciation. The current year is tracking inline with the median and showing barely 1% cumulative rise this year so far.