Quarterly Property Report for March 2011

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Eastern Beaches Quarterly Property Report January – March 2011

Contents New Zealand Economic Charts New Zealand Housing Market Page 4 Auckland Housing Market Sales Information Page 5 Sales Information – Tamaki River Page 6 Sales Information – Highway South Page 7 Sales Information – Howick South Page 8 Sales Information – Eastern Beaches Page 9 Suburb to Suburb Median Sale Price Comparison Page 10 Suburb to Suburb Median Days to Sell Page 11



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NZ Economic Charts

Real GDP CPI Inflation – annual % change

Source: RBNZ

In the December 2010 quarter NZ marginally avoided technical recession posting 0.2% QoQ growth. The next quarter (Mar11) is expected to be negative the economy digests the impacts of the second earthquake. Looking ahead the RWC and rebuild is expected to drive a rebound to strong growth going into the second half of 2011 and 2012.

Source: RBNZ While the RBNZ said that they are content that inflation will fall back within their target range (the current spike is due to the GST hike which is one-off in nature), with oil prices well above $2/litre and the likely marked boost to the economy from rebuild in activity in Christchurch inflation is likely to be on the high side.

Unemployment Rate NZDUSD exchange rate

Source: RBNZ Over the December quarter unemployment spiked to 6.8%, however this mainly reflected a fall in part-time employment (full-time employment increased) which dampened market concerns about the headline increase in unemployment.

Source: RBNZ Having traded relatively reliably above the 0.75 mark since the last quarter of 2010, following the second earthquake in Christchurch and the subsequent earthquake in Japan the Kiwi dollar started heading down toward 0.71c, however it has risen back up to 0.78c over the past month. Market expectations are for it to remain at these elevated levels.



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NZ Economic Charts

NZ interest rates NZ Net migration volumes

Source: RBNZ After the second Christchurch earthquake the RBNZ cut rates by 50bp, but highlighted that this was only a temporary insurance measure to offset any short-term quake-related weakness and that it would be removed when signs of the rebuild became clear. The market expects this will not be until early 2012 given timing/logistics issues, as well as continued aftershocks, suggesting a low interest rate environment for some time yet.

Source: Statistics NZ On a seasonally adjusted basis net migration volumes continue to be marginally positive but are well below their long term average. This helps to explain, in part, a weaker than average overall demand picture for NZ housing.

NZ Building consents - % change YoY NZ Mortgage approval volumes - % change QoQ

Source: Statistics NZ

On an annualised basis, building consents have started to reverse the positive momentum they had being showing in the months previous. While this in part reflects the stagnation of activity in Christchurch following the second earthquake, the data also showed weaker trends in general across the country as a whole.

Source: RBNZ While New Zealand mortgage approval volumes continue to remain some 30% behind the heady days of early 2000s, they are now starting to show the first signs of having bottomed, suggesting that the levels of serious buying interest is increasing.



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New Zealand Housing Market

Median house price – rolling quarter Sales volume – rolling quarter

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Source: REINZ Source: REINZ The March median house price was $365K. While house prices have quite consistently bumped around the $350K mark for the past 18 months, over the past two months house prices improved, and at $365k is the highest median house price seen in some time.

New Zealand sales volumes for the country as a whole remain at depressed levels, and on a rolling quarter basis sales were some 8% behind the same quarter of 2010. Following the second Christchurch earthquake it is sensible to expect this dampened the NZ wide outcome, and that activity in other regions is more buoyant than the data suggests.

Days to sell – rolling quarter CV comparison

Source: REINZ Source: REINZ

While days to sell over the entire NZ market appear to have spiked over the March quarter, in the month of March itself days to sell significantly to 41 (from 58 in February).

Over the past 24-30 months, properties over the entire of New Zealand continue to sell at prices in line with their valuation, a stark difference to the years preceding this where the average premium to valuation a property would sell at was around 30%.



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Auckland Housing Market



At $470K in March, the median Auckland house price has continued to follow the generally stable trend of the wider market, increasing in both February and March.

Auckland sales volumes jumped to 2437 in March. While March is traditionally a busier month, this figure is 11% ahead of the March 2010 number. Auckland sales volumes appear to be bucking the nationwide trend, which suggests that the softness in Canterbury muted the NZ-wide trends.



While days to sell appeared to spike over the past quarter, it should be noted that the months of January (in particular) and February are typically slower periods. Days to sell in March fell back to 35, in line with the stronger trends seen late last year.

Properties in Auckland have continued to sell at a marginal premium to the valuations (between 0% and 4%) since Sept 2009.



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Tamaki River

Sunnyhills, Farm Cove and Half Moon Bay



While the Tamaki River median house price came off a significant peak in late 2009, it has been relatively stable in time since. The median price currently stands at $552,000 and is currently seems to be trending upwards.

Sales volumes in Tamaki River suburbs have been very strong over the past few months, rising up to levels not seen since the peak in median house prices seen in late 2009.



Days to sell reiterate the trend seen in sales volumes, falling significantly over the past few months, and at current levels are in line with the longer term average.

In the month of March properties in Tamaki River suburbs sold at prices 16% ahead of their valuation. This compares to the longer term average of selling around a 20% premium.



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Highway South

Edgewater, Lloyd Ellsmore, Highland Park, Botany Downs and Pakuranga



In Highway South suburbs the March median house price was $445k. Looking at the average median price over the past quarter, prices are some 9% behind the same period last year.

As can be seen very clearly in the chart below, sales volumes for Highway South suburbs have quite stubbornly remained below their pre-GFC highs. With that said in the most recent months they gave started showing signs of life, and are 5.6% ahead of the same time last year.



Days to sell in Highway South suburbs, at 27 in March, are currently tracking down towards their longer term lows, a promising trend.

On average in March properties sold at prices 10.7% higher than their CV. Unlike the wider Auckland and NZ market, Highway South properties seem to continually demand a price at a material premium (around 10%) to their valuation.



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Howick South

Dannemora, East Tamaki, East Tamaki Heights, Flat Bush and North Park


Source: REINZ Source: REINZ The median house price in Howick South suburbs currently sits at $536,000, and has for the most part been trending upwards quite reliably ever since the initial shock of the GFC.

Sales volumes took a significant leg up in March, jumping to 83, which is some 17.4% ahead of the same period last year.



Days to sell in Howick South suburbs has been trending upwards as of late, and at 52 days (on a rolling quarter basis) are currently 38% ahead of the same time last year.

Properties in Howick South continue to reliably sell at prices above their valuations, at an average of 2.8% for the month of March. While this is significantly behind the longer term (7 year) average of 21.1%, post GFC the average premium is closer to 5%.



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Eastern Beaches

Cockle Bay, Howick, Mellons Bay, Bucklands Beach and Eastern Beach


Source: REINZ Source: REINZ In March the median house price was $624,000 in the Eastern Beach suburbs. On a rolling quarter basis it is in line with the previous year at $634,000 and about 3% ahead of the price recorded in February.

69 properties were sold in the Eastern Breaches suburbs in March, a number not seen since the short-lived spike the property market saw in the months immediately following the GFC.


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Days to sell spiked drastically over the March quarter to an all time high. With volumes and sale prices having shown more promising signs this suggests that days to sell could just reflect older stock skewing the data.

Properties in Eastern Beaches are similar to those in Howick South in that they continue to quite reliably sell at a premium to valuation. The 7 year average is a 23% premium, but post GFC this has fallen to 6.9%.



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Suburb to Suburb Median Sale Price Comparison

Sunnyhills, Farm Cove and Half Moon Bay Edgewater, Lloyd Elsmore Park, Highland Park, Botany

Downs and Pakuranga







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Suburb to Suburb Median Days to Sell Comparison

Sunnyhills, Farm Cove and Half Moon Bay Edgewater, Lloyd Ellsmore, Highland Park, Botany Downs

and Pakuranga





Disclaimer: While every precaution has been taken to establish the accuracy of the material herein, no liability or responsibility will be accepted for any inaccuracies. Anyone given this information should not confine themselves to the contents but make their own enquiries to satisfy themselves on all aspects. © Professionals Real Estate Ltd, 2011

Quarterly Property Report for March 2011

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