BNZ boss warns of higher home loan rates

 

The Bank of New Zealand has posted its half-year profit. Photo/Bevan Conley

Increased pressure on bank margins will mean higher home loan rates, says Bank of New Zealand boss Anthony Healy.
Speaking after the bank delivered its half-year net profit of $416 million, an 8 per cent drop on the same prior period, Healy said it was starting to see a softening in the property market.
But demand for loans remained higher than deposit growth which meant banks were having to pay more for deposits resulting in those costs being passed through to borrowers.
"I think there will continue to be pressure on mortgage rates. Banks have seen a compression of margins and that is going to continue," he said.
BNZ's net interest margin dropped 12 basis points to 2.15 per cent during the half year to March 31.
So far this year banks have increased their mortgage rates incrementally with some moving them up at 5 or 10 basis points every few weeks.
Healy said that was likely to continue.

"We used to see big step changes in mortgage rates, that was because they were linked more to the cash rate but because of the way banks are now funded it is more of an incremental game."
Healy said a softening in the property market was good thing but he said it would be a worry if construction growth were to slow further.
While housing affordability continued to be an issue, he said the biggest risks to the bank were unknown factors such as the volatility in global markets, the twists and turns in US politics and what was happening in North Korea.
Healy also pointed to growing global regulation of banks which could increase how much capital they have to hold.

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"Banks are waiting to see if new benchmarks will be higher."
If they are increased, that could result in banks having to raise more capital. If it all comes at the same time, that could mean more competition for funding which could push up costs.
New capital regulations were expected to be announced in the next 12 months, he said
While the bank's net profit fell, its cash earnings rose $40 million to $484m.
Deposits at the bank increased by $4.2 billion or 8.6 per cent to $53b over the half while loans and acceptances increased $5.1b or 7.2 per cent to $76.2b driven by housing and business lending.
Healy said it had focused on sustainable growth in the mortgage market by growing its business via brokers which had seen a boost of $900m in broker home loans this year.
The bank's net interest income increased by $25m or 3.1 per cent in the half, driven by growth in lending an deposit volumes partly offset by lower margins.
BNZ's operating expenses increased $3m or 0.7 per cent while its charges for bad and doubtful debts fell by $44m as a result of improved economic conditions including the outlook for dairy.
Healy said the BNZ maintained a robust capital structure, with a strong balance sheet that is well funded through diversified and stable funding sources.
BNZ's Core Funding Ratio of 85.59 per cent exceeded the Reserve Bank of New Zealand minimum requirement of 75 per cent as at March 31.

- NZ Herald source:http://www.nzherald.co.nz/mortgages/news/article.cfm?c_id=516&objectid=11849896

New Zealand housing market overvalued, could go bust, says Goldman Sachs

New Zealand's housing market has a 40 per cent chance of going bust in the next two years, according to global investment bank Goldman Sachs.
In a research note published this week Goldman says the New Zealand's housing market is the most over-valued amongst the G-10 group of developed economies, Bloomberg reports.
Goldman, Bloomberg said, defines bust as house prices falling five percent or more after adjustment for inflation.
Bloomberg reports that Goldman looked at housing markets in the G-10 countries -those with the 10 most-traded currencies in the world - and finds they are most elevated in small, open economies such as New Zealand, where house prices have rocketed in recent years.
Goldman compares house-price levels across economies using three standard metrics: the ratio of house prices to rent, the ratio of house prices to household income and house prices adjusted for inflation.

"Using an average of these measures, house prices in New Zealand appear the most over-valued, followed by Canada, Sweden, Australia and Norway," it said. "According to the model, the probability of a housing bust over the next five to eight quarters is the highest in Sweden and New Zealand at 35 to 40 percent."
While Sweden's risk, according to Goldman, is just above 35 per cent. The risk of a bust in Australia is about 25 per cent.
Labour housing spokesman Phil Twyford said a housing bust could be just as bad as skyrocketing prices.
He said the warning highlighted the consequences of nine years of housing neglect by the Government.

"A housing bust would see a slow-down in house construction. When only half the houses Auckland need are being built at the moment, a slow-down would be a disaster," he said.

"The resulting job losses and reduction in household confidence would ripple through the wider economy."
Finance Minister Steven Joyce downplayed the report but did note the conditions which led to New Zealand's housing boom were coming to an end.

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"We need to be cautious with the Goldman Sachs report because the model is very sensitive. They define a bust as a 5 per cent decline in real house prices," he said.
"The Government has a number of measures in place to influence both demand and supply in the housing market, with LVR restrictions and the bright line test moderating demand, and significant regulatory activity encouraging supply, plus of course the Crown house building programme which has been expanded significantly today.
"New Zealand is currently experiencing a building boom with 30,000 houses being built, a third of which are in Auckland. House prices in Auckland have also been flat to slightly falling over the last nine months.
House buyers were right to be cautious at this stage of the cycle, he said.
"The big increase in house building we are seeing and the lift in world economic activity means two of the big influences on house prices, historically low interest rates and supply shortages, are starting to come towards the end of their run."

- NZ Herald Source: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11857022

Manawatu - Whanganui hits the property sweet spot

Source: Unconditional.co.nz
Manawatu-Wanganui hits the property sweet spot, Posted: 31 Oct 2016 09:05 AM PDT While demand in the Auckland property market has slowed The Manawatu-Wanganui region has hit the property sweet spot not only with locals, but with Aucklanders and Wellingtonians who are increasingly searching for property on realestate.co.nz. The search is most popular among those in the 25 – 44 year old age group. Real time statistics from realestate.co.nz for the month ending October, show that demand (as measured by taking the number of listing views of residential properties on the site and comparing it with the average number of views over the previous 12 months*) is up 50.4 per cent in Manawatu-Wanganui. Over the same period, demand for property in Auckland has fallen by 9.6 per cent. "Kiwis across the country aspire to own their own home and while most of the people searching in Manawatu-Wanganui are from the local area, 33.4 per cent more Aucklanders are also looking in the region (when compared with the same time last year) for the perfect match for their budget," says realestate.co.nz CEO Brendon Skipper. Wellingtonians are also keen on the Manawatu-Wanganui region, with a 53 per cent increase in site users viewing properties in this region when compared with the same month last year (October 2015). Most of the attention in the region is on Palmerston North. The city has a long-term reputation as being one of the most affordable centres in New Zealand. The average asking price for a home in Manawatu-Wanganui is $288,267, compared with Auckland which in the same month rose to another all-time high of $943,258. Of the 19 regions across the country, there are only two regions (West Coast and Southland) where the average asking price is lower than Manawatu-Wanganui. "It makes sense that Aucklanders would be looking at other regions and not only exploring investment options, but also weighing up the lifestyle benefits of a move outside of the big city," ays Brendon. In addition to popular West Coast beaches, Manawatu-Wanganui is well located for visiting other regions. Wellington, Wairarapa, Wanganui, Taupo, Hawke's Bay and the Ohakune ski fields are all within a three-hour drive. In the October realestate.co.nz rental yield statistics, Manawatu-Wanganui is ranked the third best place to invest in a rental property. Investors would theoretically receive 5.3 per cent yield over a 12-month period – based on realestate.co.nz's calculation of average asking price vs weekly rental price, excluding all external costs. Another solid reason to look at investing in Manawatu-Wanganui. Auckland, the shine has dulled Auckland was the only region across the country where the total number of residential dwellings for sale (inventory) was up, compared to October 2015. Total stock fell in all other regions across New Zealand. While Auckland was up slightly (1.4 per cent), nationally the total housing stock levels fell dramatically (by 24 per cent) when compared to the same month last year. "Auckland asking prices continue to rise and as such, homes are spending longer on the market. Vendors continue to be focused on selling at a premium while buyers are being more considered and taking time to assess all of their options. With more stock on the market buyers aren't feeling the same pressure they were 12 months ago," says Brendon. If no new listings were to come onto market in Auckland, all the existing properties would be sold in 12.5 weeks, compared to 9.3 weeks in May this year. It's not just global travellers who think Taranaki is a hot spot "Big kudos to Taranaki for being named by the renowned 'Lonely Planet Best in Travel Awards 2017' as the second-best region in the world people should visit next year," says Brendon Skipper. "But it's not just global travellers who have turned their attention to Taranaki," he says. New demand statistics generated by realestate.co.nz show that Aucklanders outnumber locals in terms of searching the region's property offerings. "It's a hot destination and the market reflects its growing status," says Brendon. Taranaki property prices are now at an all-time high at $384,401, which is up 5.2 per cent on the previous month (September 2016). There's also a shortage of listings, down 28.1 per cent compared to October 2015. "It's a classic supply and demand situation," says Brendon.

 

 

National house asking prices fall for the first time since April 2016

Source: Unconditional.co.nz - National house asking prices fall for the first time since April 2016

 

Posted: 01 Aug 2016 02:10 PM PDT - slow-down in Auckland demand – significant variations across the country – The national average asking house price fell in July – the first decline in three months – while demand continued to rise.

 

Real-time market statistics released today by realestate.co.nz show that in July, the seasonally adjusted asking price for homes across the country fell by $7,556 (1.3 per cent) when compared to June 2016. The average national asking price in July was $569,971. On the demand side, there was a 10.39 per cent decrease in viewing sessions for Auckland properties on realestate.co.nz when compared with the same time last year and users also dropped by 4.90 per cent. This continuing trend was first referenced in last month's property report and reinforces the possibility that the shine may have gone off the Auckland market. Nationally, demand increased by 14.48 percent when compared with July 2015. Other regions which saw an increase in viewing sessions were Canterbury and Central Lakes/Otago both at 11.40 per cent, Marlborough with 19.03 per cent and Wellington with a very large 22.52 per cent increase.

 

Auckland still continues its upward trajectory, with the July average asking price at a record high of $898,562 (up 1.1% from the previous month). "There have been calls across the nation for measures to rein in house prices, but it may be that the market is actually self-correcting, albeit slightly, with buyers unwilling or unable to meet ever-increasing price rises. "Whether the fall is the start of a trend is still to be determined," she says.

 

National average asking price:

 

April       May      June     July      

$561,283              $570,971             $577,527             $569,971            

 

"In addition to Auckland, the main centres where asking prices continued to increase were Waikato, Wellington and Otago, but in Canterbury it's a different picture where asking prices fell for the third month in a row in July," Taylor says. The July asking price in Canterbury stood at $462,936, almost $10,000 lower than in May this year ($472,274) but demand is still high. An 8.33 per cent increase in sessions from June and 11.40 per cent increase on July 2015. There have also been some highs and lows in the regions, with Central Lakes/Otago asking prices falling 20.9 per cent compared with the previous month. While this could be a one-off (dropping to $680,672) it's still significantly lower than the same time last year ($756,063 in July 2015), comments Vanessa.

 

At the two ends of the country, asking prices have also fallen.  In July the Northland average asking price stood at $480,006, a 4.7 per cent fall from June (down from $503,527). Southland also recorded a 4.7 per cent fall, with the average asking price in July standing at $250,041, down from $262,285 in June. By contrast, Nelson and Marlborough are on the up, with Marlborough the star performer. Average asking prices in the lifestyle region of Marlborough hit the half-million-dollar mark for the first time ever ($503,997). The figures show that Marlborough had a large increase in demand in July, a month on month increase of 10.94 per cent with a large 19.03% increase on July 2015.

 

Property listings static. The variances across the country are also reflected in the number of new properties coming onto the market, which have remained relatively static nationally compared to the same time last year (down 0.6 per cent from July 2015). For example, regionally we see new listings down by 18.9 per cent in Wairapapa on the same time last year, while at the other extreme Central North Island was up by 35.5 per cent.

 

Rental yield mirror bigger picture - On 27 June, the Reserve Bank released official statistics for the first time showing that in May 2016 some 40 per cent of all mortgage lending was on interest-only payment terms.  This percentage has been "fairly stable" since the data was first available to the Reserve Bank in July 2015. "It reinforces what we said in last month's property report where we stated that many investors appear to be looking for capital gain, rather than focused on rental yield," says Vanessa Taylor.

 

For example, in Auckland where asking prices continue to rise, investors theoretically would receive 3.28 per cent yield over a 12-month period – based on our calculation of average asking price vs weekly rental price, excluding all external costs. Waikato, Auckland and Wellington respectively take up the bottom three spots below the national average, while regional areas dominate the higher returns. West Coast (8.44 per cent), Wairarapa (6.01 percent) and Southland (5.93 per cent) fill the top three spots across the nation.

 

About realestate.co.nz - Realestate.co.nz is dedicated to property and is the official website of the New Zealand real estate industry. As a property listing site, the information it draws on for its property report is in real time. Realestate.co.nz has the country's most comprehensive selection of real estate listings online. The site presents more than 97 per cent of all residential, commercial and rural properties currently marketed by real estate professionals. Focussed exclusively on people in need of property, realestate.co.nz offers superior functionality, including accurate search, school zone data and a mobile app.

 

Glossary of terms - Realestate.co.nz provides valuable property market data not available from other sources.

 

Average asking price gives an indication of current market sentiment. Statistically, asking prices tend to correlate closely with the sales prices recorded in future months when those properties are sold. As it looks at different data, average asking prices may differ from recorded sales data released at the same time.

Inventory is a measure of how long it would take, theoretically, to sell the current stock at current average rates of sale if no new properties were to be listed for sale. It provides a measure of the rate of turnover in the market.

New listings are a record of all the new listings on realestate.co.nz for the relevant calendar month. As we reflect 97 per cent of all properties listed through registered estate agents in New Zealand, this gives a representative view of the market.

Seasonal adjustment is a method we use to better represent the core underlying trend of the property market in New Zealand. This is done using methodology from the New Zealand Institute of Economic Research.

Truncated mean is the method we use to provide statistically relevant asking prices. The top and bottom 10 per cent of listings in each area are removed before the average is calculated, to prevent exceptional listings from providing false impressions. Read more here http://unconditional.co.nz/blog/nz-property-report-a-changed-measure-for-asking-price-introducing-truncated-mean/> .

National house asking prices fall for the first time since April 2016

 

Source: Unconditional.co.nz

---

National house asking prices fall for the first time since April 2016 Posted: 01 Aug 2016 02:10 PM PDT § slow-down in Auckland demand – § significant variations across the country –   The national average asking house price fell in July – the first decline in three months – while demand continued to rise. Real-time market statistics released today by realestate.co.nz show that in July, the seasonally adjusted asking price for homes across the country fell by $7,556 (1.3 per cent) when compared to June 2016. The average national asking price in July was $569,971. On the demand side, there was a 10.39 per cent decrease in viewing sessions for Auckland properties on realestate.co.nz when compared with the same time last year and users also dropped by 4.90 per cent. This continuing trend was first referenced in last month's property report and reinforces the possibility that the shine may have gone off the Auckland market. Nationally, demand increased by 14.48 percent when compared with July 2015. Other regions which saw an increase in viewing sessions were Canterbury and Central Lakes/Otago both at 11.40 per cent, Marlborough with 19.03 per cent and Wellington with a very large 22.52 per cent increase. Asking prices vary across the regions 'Significant variations in asking prices across the country paint an interesting picture', says Vanessa. Auckland still continues its upward trajectory, with the July average asking price at a record high of $898,562 (up 1.1% from the previous month). "There have been calls across the nation for measures to rein in house prices, but it may be that the market is actually self-correcting, albeit slightly, with buyers unwilling or unable to meet ever-increasing price rises. "Whether the fall is the start of a trend is still to be determined," she says. National average asking price: April May June July $561,283 $570,971 $577,527 $569,971  "In addition to Auckland, the main centres where asking prices continued to increase were Waikato, Wellington and Otago, but in Canterbury it's a different picture where asking prices fell for the third month in a row in July," Taylor says. The July asking price in Canterbury stood at $462,936, almost $10,000 lower than in May this year ($472,274) but demand is still high. An 8.33 per cent increase in sessions from June and 11.40 per cent increase on July 2015. There have also been some highs and lows in the regions, with Central Lakes/Otago asking prices falling 20.9 per cent compared with the previous month. While this could be a one-off (dropping to $680,672) it's still significantly lower than the same time last year ($756,063 in July 2015), comments Vanessa. At the two ends of the country, asking prices have also fallen.  In July the Northland average asking price stood at $480,006, a 4.7 per cent fall from June (down from $503,527). Southland also recorded a 4.7 per cent fall, with the average asking price in July standing at $250,041, down from $262,285 in June. By contrast, Nelson and Marlborough are on the up, with Marlborough the star performer. Average asking prices in the lifestyle region of Marlborough hit the half-million-dollar mark for the first time ever ($503,997). The figures show that Marlborough had a large increase in demand in July, a month on month increase of 10.94 per cent with a large 19.03% increase on July 2015.   Property listings static - The variances across the country are also reflected in the number of new properties coming onto the market, which have remained relatively static nationally compared to the same time last year (down 0.6 per cent from July 2015). For example, regionally we see new listings down by 18.9 per cent in Wairapapa on the same time last year, while at the other extreme Central North Island was up by 35.5 per cent. Rental yield mirror bigger picture On 27 June, the Reserve Bank released official statistics for the first time showing that in May 2016 some 40 per cent of all mortgage lending was on interest-only payment terms.  This percentage has been "fairly stable" since the data was first available to the Reserve Bank in July 2015. "It reinforces what we said in last month's property report where we stated that many investors appear to be looking for capital gain, rather than focused on rental yield," says Vanessa Taylor. For example, in Auckland where asking prices continue to rise, investors theoretically would receive 3.28 per cent yield over a 12-month period – based on our calculation of average asking price vs weekly rental price, excluding all external costs. Waikato, Auckland and Wellington respectively take up the bottom three spots below the national average, while regional areas dominate the higher returns. West Coast (8.44 per cent), Wairarapa (6.01 percent) and Southland (5.93 per cent) fill the top three spots across the nation. About realestate.co.nz - Realestate.co.nz is dedicated to property and is the official website of the New Zealand real estate industry. As a property listing site, the information it draws on for its property report is in real time. Realestate.co.nz has the country's most comprehensive selection of real estate listings online. The site presents more than 97 per cent of all residential, commercial and rural properties currently marketed by real estate professionals. Focussed exclusively on people in need of property, realestate.co.nz offers superior functionality, including accurate search, school zone data and a mobile app.  Glossary of terms Realestate.co.nz provides valuable property market data not available from other sources. § Average asking price gives an indication of current market sentiment. Statistically, asking prices tend to correlate closely with the sales prices recorded in future months when those properties are sold. As it looks at different data, average asking prices may differ from recorded sales data released at the same time. § Inventory is a measure of how long it would take, theoretically, to sell the current stock at current average rates of sale if no new properties were to be listed for sale. It provides a measure of the rate of turnover in the market. § New listings are a record of all the new listings on realestate.co.nz for the relevant calendar month. As we reflect 97 per cent of all properties listed through registered estate agents in New Zealand, this gives a representative view of the market. § Seasonal adjustment is a method we use to better represent the core underlying trend of the property market in New Zealand. This is done using methodology from the New Zealand Institute of Economic Research. § Truncated mean is the method we use to provide statistically relevant asking prices. The top and bottom 10 per cent of listings in each area are removed before the average is calculated, to prevent exceptional listings from providing false impressions. Read more here.

 

 

Has the shine gone off the Auckland property market?

 

Source - Unconditional.co.nz

---

Has the shine gone off the Auckland property market? Posted: 10 Jul 2016 05:15 PM PDT – Far North the new hot spot for buyers, Otago the new #1 for rental returns –  Interest in the Auckland property market has dropped on the back of ever increasing house prices and falling returns for investors. Auckland average asking prices rose again to another all-time high in June to $888,493, but searches on realestate.co.nz for properties in the city has fallen, says CEO Brendon Skipper. "It could be a turning point for Auckland, with prices now at an all-time high they're almost out of reach for the average income earner, with first home buyers the hardest hit," he says. During June, the number of users searching Auckland houses 'for sale' on realestate.co.nz fell by 19.33 per cent compared to the same time last year. The site also measures engagement and in June it fell by more than a third across the Auckland region when compared to June 2015. "Nationally, the volume of traffic to our site is comparable across the country for this time of year, but it appears buyers are moving away from looking in the Auckland area in favour of other regions," comments Brendon. Northland, Hamilton, Tauranga and Queenstown flavours of the month Searches for properties in Northland, Hamilton, Tauranga and Queenstown were up significantly in June compared to the same period last year. "It appears Aucklanders still want to stay in relatively close proximity to our biggest city, but in terms of affordability they are forced to move even further afield, or they are making lifestyle changes," he observes. Hot spots in Northland are Waipu, Whangarei Heads, Paihia and Tutukaka which all have a significant increase in users looking in those areas. "Whangarei Heads is the suburb to watch, with online engagement up by 42 per cent on same time last year," notes Brendon. In the Far North, Kerikeri Surrounds, Paihia and the Karikari Peninsula were the most searched. Further south, Hamilton and Tauranga continues to attract high levels of online engagement and Queenstown continues to be a perennial favourite," says Brendon.   Theoretical yield for new Auckland property investors takes a dive  Auckland property investors are taking a hit on their theoretical yield in the rental market. "Investors buying a house in June at the average price of $888,493 theoretically would receive 3.18 per cent yield on the average rent in Auckland – based on our calculation of average asking price vs weekly rental price, excluding all external costs,' explains Brendon. "This puts them at the bottom of the ladder across all 19 regions." See chart below. "It suggests that Auckland investors are relying on future capital gains rather than rental returns or having to look at other property types when considering their investments" Nationally, the average theoretical yield on a property is 3.96 per cent (based on the average price and rented out at the average asking rental price). By comparison, the star performer in terms of theoretical yield on investment property is Otago, showing an average yield of 7.32 per cent. National picture shows that sellers are back in the market Across the nation, sellers are coming back in the market with 15 out of the 19 regions showing an increase in new listings compared to the same time last year. "This is significant, as June is traditionally a quiet time of the year, on a par with December and January" explains Brendon. "The message seems to be getting through that with the shortage of listings and the speed in which properties are selling. It's a sellers' market. "While there is still a shortage of listings this is a positive sign for getting more equilibrium in the marketplace," he says.   About Realestate.co.nz - Realestate.co.nz is dedicated to property and is the official website of the New Zealand real estate industry. As a property listing site the information it draws on for its property report is in real time. Realestate.co.nz has the country's most comprehensive selection of real estate listings online. The site presents more than 97% of all residential, commercial and rural properties currently marketed by real estate professionals. Focussed exclusively on people in need of property, Realestate.co.nz offers superior functionality, including accurate search, school zone data and a mobile app.  Glossary of terms - Realestate.co.nz provides valuable property market data not available from other sources. § Average asking price gives an indication of current market sentiment. Statistically, asking prices tend to correlate closely with the sales prices recorded in future months when those properties are sold. As it looks at different data, average asking prices may differ from recorded sales data released at the same time. § Inventory is a measure of how long it would take, theoretically, to sell the current stock at current average rates of sale if no new properties were to be listed for sale. It provides a measure of the rate of turnover in the market. § New listings are a record of all the new listings on Realestate.co.nz for the relevant calendar month. As we reflect 97% of all properties listed through registered estate agents in New Zealand, this gives a representative view of the market. § Seasonal adjustment is a method we use to better represent the core underlying trend of the property market in New Zealand. This is done using methodology from the New Zealand Institute of Economic Research. § Truncated mean is the method we use to provide statistically relevant asking prices. The top and bottom 10% of listings in each area are removed before the average is calculated, to prevent exceptional listings from providing false impressions. Read more here.

 

 

Scarcity of houses for sale nationally creates sellers’ market

Source: Unconditional.co.nz

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Scarcity of houses for sale nationally creates sellers' market Posted: 31 May 2016 01:32 PM PDT Realestate.co.nz statistics show demand and prices up, supply down Download the full report here. The average asking price for a New Zealand house hit an all-time high with stock at an all-time low for May 2016, in a market which is heavily favouring sellers. Real-time market statistics released today by Realestate.co.nz show the May national average asking price reached $570,971, up 7.2 per cent from the same time the previous year. On the supply side in May, the number of new properties that came onto the market nationally dropped 7.1 per cent from the previous month and the long term average has also fallen. "In this environment, if no new listings were to come onto the market nationally and all the existing properties sold, theoretically there would be no properties for sale in New Zealand within 12 weeks," says Realestate.co.nz spokesperson Vanessa Taylor. "It's a classic supply and demand situation and right now it's definitely a sellers' market," she says. Heightened real estate activity has been evident across both the North and South Islands. The Central Otago/Lakes region and Nelson in the South Island are notable stand-outs, with Wellington, Waikato and Auckland in the North Island continuing to feature strongly. SOUTH ISLAND REGIONS ON THE UP In May, the Central Otago/Lakes topped New Zealand in terms of percentage average asking price at 17.2 per cent, the region also recorded the largest drop in new property listings down 32.9 per cent, both compared with the same time last year. The average asking price for Central Otago/Lakes region for May hit $819,778. Traffic data reveals a sharp increase in users residing in the neighbouring Otago region viewing property in Central Otago/Lakes, with engagement up by 75.98 per cent on the same time last year. At the other end of the South Island, it's a similar story for Nelson, which recorded a record high asking price of $510,709 and a significant drop in new property listings (down 30.9 per cent on the same time the previous year). NORTH ISLAND DOMINATED BY MAJOR CITIES  In April, Realestate.co.nz reported an all-time low in the number of properties for sale in Wellington. In May, inventory levels dropped even further in the capital city. Theoretically, if no new listings were to be posted to the site and the existing properties sold, there would be no properties for sale in just 5.1 weeks (compared with 5.6 weeks in April 2016). "Waikato also has an interesting profile," says Vanessa Taylor. "Asking prices are up a healthy 6.1 per cent on the previous month, coming closely behind Nelson and Central Otago/Lakes in terms of percentage increases across the country," she says. "At the same time new listings remain relatively static in the Waikato region. "We could be tempted to make an assumption that Aucklanders are looking further south to the Waikato. However data shows us that we have seen a strong (75.35 per cent) increase in users from the Bay of Plenty looking at the region. In saying that, the strongest interest is actually coming from users who already reside within the Waikato region," she says. "Drilling further down into the data, the hot spots in the Waikato region that are most searched are Cambridge, Te Awamutu and Morrinsville. Surprisingly, data suggests that Melville could be an up and comer with a 217.59% per cent increase in online engagement." The average asking price in the Waikato is $467,717 compared to Auckland where it stands at $879,730. Auckland is also suffering a fall in inventory levels, with listings down 9.2 per cent on the same time last year (May 2015). "A fall of close to 10 per cent in listings in one year in a city the size of Auckland is very significant," says Vanessa Taylor. "At the same time Auckland asking prices have risen in the past month by 2.1 per cent (compared with April 2016) albeit off a high value base," she says. Auckland asking house prices have risen 10.9 per cent compared to the same time last year (May 2015).   Refer infographics – § New Property Listings for May 2016, compared to May 2015 (all regions) § Property asking price for May 2016, compared to prior month (all regions) § NZ Inventory of listings for May 2016 / long term average (all regions)   About Realestate.co.nz - Realestate.co.nz is dedicated to property and is the official website of the New Zealand real estate industry. As a property listing site the information it draws on for its property report is in real time. Realestate.co.nz has the country's most comprehensive selection of real estate listings online. The site presents more than 97% of all residential, commercial and rural properties currently marketed by real estate professionals. Focussed exclusively on people in need of property, Realestate.co.nz offers superior functionality, including accurate search, school zone data and a mobile app.  Glossary of terms Realestate.co.nz provides valuable property market data not available from other sources. § Average asking price gives an indication of current market sentiment. Statistically, asking prices tend to correlate closely with the sales prices recorded in future months when those properties are sold. As it looks at different data, average asking prices may differ from recorded sales data released at the same time. § Inventory is a measure of how long it would take, theoretically, to sell the current stock at current average rates of sale if no new properties were to be listed for sale. It provides a measure of the rate of turnover in the market. § New listings are a record of all the new listings on Realestate.co.nz for the relevant calendar month. As we reflect 97% of all properties listed through registered estate agents in New Zealand, this gives a representative view of the market. § Seasonal adjustment is a method we use to better represent the core underlying trend of the property market in New Zealand. This is done using methodology from the New Zealand Institute of Economic Research. § Truncated mean is the method we use to provide statistically relevant asking prices. The top and bottom 10% of listings in each area are removed before the average is calculated, to prevent exceptional listings from providing false impressions. Read more here.