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The tight housing market got even tighter in December, but average asking prices fell survey shows

Posted in Property
Asking prices fell in December

The new year starts with even fewer properties for sale, and a somewhat surprising easing in asking prices, according to the December NZ Property Report from realestate.co.nz.

Auckland, Waikato and Otago were most affected by low inventory levels, with stocks of unsold homes falling to a new record lows of 13.9 weeks of inventory in Auckland, 31.5 weeks in Waikato, and 20.4 weeks in Otago, each well below their long term inventory levels.

Inventory levels across the country remain low and the market remains a firms sellers market across 16 of NZ’s 19 regions in the survey.

The seasonally adjusted truncated mean asking price for listings in December was $422,636 which eased from the record high of $446,277 set in November.

The month-on-month decrease of 5% takes the month level to 1% up on December last year.

The level of new listings coming on to the market in December fell on a seasonally adjusted basis by 8.4%. A total of 8,482 new listings were added representing a 3% year-on-year fall.

For the calendar year of 2012 a total of 132,243 new listings came on to the market as compared to 124,748 for calendar year 2011 – a rise of 6%. By comparison the prior years stats were 2007: 177,529; 2008: 163,488; 2009: 135,416; 2010: 138, 789. Compared to the peak of the market on 2007 listings are down 26%.

ASB economist Jane Turner commented on the Report saying:

We interpret December and January housing figures with greater caution than usual, given the limitations of seasonally-adjusted monthly data over a small sample.

Nonetheless, the results suggest the housing market has potentially tightened further in December with supply failing to respond to the increase in demand over 2012. 

Ongoing tightness in the housing market will continue to place upward pressure on house prices. 

The RBNZ faces a dilemma of balancing a supply-constrained housing market fuelling a lift in credit growth against a muted economic recovery.  In light of the weaker economic growth figures, we now expect the RBNZ will keep the OCR on hold until December 2013 (previously September). 

However, we believe the RBNZ will not be able to tolerate the momentum in house prices and credit growth for much longer, as it poses a risk to both monetary and financial stability objectives.

There is a growing possibility that the RBNZ will opt to use macro-prudential tools at some point in 2013 in order to ease pressure in the housing market.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment in the box on the right or click on the "'Register" link at the bottom of the comments.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

21 Comments

The Savings Working Group put

Good call....but any rise in

Good call....but any rise in the ocr will have to be soon...wait too long and the memory will be alive and well come the election next year...

Which country's

Which country's housing/income ratio is Auckland trending towards to?

There is NO chance of an OCR

There is NO chance of an OCR hike any time soon. Our dollar is already higher than we would like and exporters are struggling. An increase in the OCR would make this worse.

Happy new year to all. 2013

Happy new year to all.

2013 begins with record low number of listings in Auckland + record low interest rates.

I think we all know how this is going to play out.

Property will possibly beat

Property will possibly beat inflation by a little bit but will be second to the share market where the real money is made. To be in shares you have to have some guts and money of your own and that is why the returns are so good. Dividends come to you  normally tax paid and no tenants or costs. What could be better than that.

Real money? What an

Real money? What an intriguing concept but I would suggest you have absolutely no clue what you are talking about.

 

Happy new year :-)

Yes, low + low = very low

Yes, low + low = very low house prices - time to buy yay!!

Just came back from our

Just came back from our holiday to Europe/US East Coast.  In the US, one can get an mortgage as low as 2.97 % for the entire mortgage term (20-30 years).  I cried myself to sleep!

Kiwis & Aussies have been

Kiwis & Aussies have been hoodwinked into thinking their interest rates are currently low.  They are actually skyhigh compared to every other developed country exclusing maybe India.

We must be the lowest risk developed country in the world. So why the super premium on our interest rates?   Are we here for the benefit of global FX traders? A safe haven offering maximum interest yields?

And why are kiwis paying $2.10 for petrol?  Even Aus is 1.37 ...  

We are being fleeced ....

We are being fleeced

We are being fleeced ....

Well you are the land of 44 million sheep!

I bet last year that by July this year I'd be getting a better rate from the bank than my current 4.99%. While I doubt I'll be getting offered 2% any time soon, I am still optimistic that I'll be able to refinance at a lower rate.

Time will tell...

2% and less in the UK. It's

2% and less in the UK. It's cheaper there to buy a decent flat in a nice area (say, Richmond Upon Thames) than it is in Auckland and certainly here in Seeedney!!
 

I spent 4 days in London,

I spent 4 days in London, Mayfair area..  Mortagage rates in London are around the 2% mark but only for 3 years max.  Inner London is way way expensive when you compare to the average wages.. much more than Seeedney.

Rented a place in Sydney -

Rented a place in Sydney - house split in 3 'flats' -  val  = 1.7mill.  Rented for 500 a week.  Ok, better to rent than to buy in those conditions.

Floating rate higher in Aus than NZ. 

THE fallout from the weak

THE fallout from the weak global economy has forced down residential land values in Sydney for the first time in six years.

The declines are most pronounced in the "banker and lawyer" belt of the city's east and lower north shore.

By contrast, the inner west has shown sizeable gains during the past 12 months, thanks to its convenience and good infrastructure.

The data, released on Saturday, shows residential land values are failing to keep up with the rate of inflation. Prices declined by 0.24 per cent in 2011-12, the first fall in six years.

The NSW Valuer-General, Philip Western, said the decline reflected the weak global economy and the soft domestic economy. This had hurt the top end of the market in particular: values fell in Woollahra, Mosman, Waverley and Randwick, which also followed lower sales volumes of higher-end properties.

"Overseas demand for property from purchasers from Asian economies such as from China has also reduced," he said.

 

http://smh.domain.com.au/real-estate-news/economy-takes-toll-on-land-val...

The rate on my US  property

The rate on my US  property is 2.55%, 20 year term and its tax deductible...so real rate....less than 2%.

Its not me doing the talking

Its not me doing the talking Scarfie. It is a fact last years returns on the NZ sharemarket killed even the returns on the auckland property scene and the NZx has had an excellent start to the year. Over a period of time shares beat property. That is why serious players get into shares and those who are more risk averse go for property. Also you need cash for shares generally unlike property where you can leverage. Property is lower risk so lower returns historically.

Ask Warren Buffett any further questions.

WEM

WEM

Auckland is set for another

Auckland is set for another double digit price gain in 2013.

And the ripples are spreading to other parts of the country.

 

I note that this article is

I note that this article is regarding the "asking price" and that in my area its up by approximately 18%. I can tell you on good authority that that is not what property is being sold for -  selling price is around -10% on QV not the asking price.  

That's good if you are

That's good if you are selling your Auckland property and buy in Wellington!!  I am tempted :)