"Property sales up 21% on prior year to the highest level since 2007" read the press release from REINZ summing up the past calendar year.
Certainly the property market has seen a recovery which started last year rising 9% from the low of 56,000 in 2010, and then this past year rising a further 21% to the total of 74,000 property sales.
However as the chart above shows that sales last year were 10% below the average of the past two decades.
Ranked for those past 21 years from the lowest sales year (2008) to the highest (2003) shows in fact that the total sales for 2012 was identical to the year 1993 - can anyone remember that far back in terms of real estate ??
That situation where sales last year totaled the same as nearly 20 years ago brings to mind the analysis of relative sales to the number of dwellings in this country.
In 1993 according to data from Stats NZ there were 1.214 million dwellings and therefore the sales in that year of 73,959 represented 6.1% of all dwellings being transacted just above the 21 year long term average of 5.9%. At this time there are estimated to be (we are awaiting the next census) 1.558 million dwellings, so the total sales of 74,000 in 2012 represents just 4.8% of all properties being transacted in that year. Clearly we are yet to return to what might be called normal levels.
I read with interest the latest REINZ property data for sales in December with a mix of surprise and disbelief this week - focused on this statement:
“A key development during 2012 has been the
growth in sales by auction, with the number of properties sold by auction
growing by more than two-thirds compared to 2011. The growth in auction sales has been
particularly strong in Auckland where almost two of every five sales are now by
auction. The trend in auctions is
evidence of the continued tightness of some parts of the residential real
estate market where demand is increasing, but supply remains constrained.”
Total sales by auction growing by more than 66% and in Auckland 40% of sales as auctions!
I found these numbers surprising and somewhat hard to believe. The REINZ has only recently been reporting sales by pricing type and I wondered if their data was inaccurate. The reason for my concern was prior data reported by Realestate.co.nz of earlier in 2012.
At the last period of reporting being March 2012, the number of new listings marketed as auctions was 13% nationally and 24% in Auckland. The data as presented below also showing the make up of auctions a year earlier in March 2011 by region of the country.
Could the representation of auctions in the marketing of property in Auckland have really risen from 24% in March to over 40% in December?
Unfortunately I do not have access to the data warehouse of Realestate.co.nz but the website does provide an easy way of counting listings by date and also by price type. Analysis of the numbers for just new listings coming onto the market over the first 17 days of January is quiet surprising in my mind.
Across the country in 17 days of the 3,621 new listings, just under 1 in 5 (673) were marketed as auctions, in the case of Auckland 424 properties were marketed as auctions out of 1,069 new listings - 40%.
I am amazed at the extent to which auctions have taken off in the past year in Auckland, going from 1 in 4 of new listings in March 2012 to 2 out of 5 just 10 months later. Clearly the market is far more dynamic and property is selling fast and as a consequence agents are recommending this method of sale - the REINZ data is bang on, auctions are a key development in the NZ property market.
