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New property listings on Realestate.co.nz recovered well after the Level 4 lockdown but remained flat over winter

New property listings on Realestate.co.nz recovered well after the Level 4 lockdown but remained flat over winter

The number of residential properties being listed for sale continues to track well above this time last year, although there is no sign yet of a spring surge in new listings.

There were 8968 new residential property listings from throughout the country on the property sales website Realestate.co.nz in August, up 16% compared to August last year.

That was the highest number of new listings received by the website in the month of August since the tail end of the last property boom, in August 2016.

That included 3188 new listings of properties in Auckland, which was up 20% compared to August last year, and also the highest number for the month of August since 2016.

However while the number of new listings has been well up on the same period of last year, they have been relatively flat over the winter months.

Realestate.co.nz figures showed that new listings slumped to 2962 nationally in April as the Level 4 lockdown took hold, but recovered strongly to 8324 in May. They then rose again to 9033 in June, before dropping back slightly to 8808 in July and 8968 in August.

That suggests the general buoyancy evident in the housing market in July and August has not resulted in an early spring rush of properties onto the market.

That is showing up in stock levels - the total number of properties available for sale on the Realestate.co.nz website at the end of each month.

At the end of August, Realestate.co.nz had 17,974 residential properties available for sale, which was down 13.2% compared to a year earlier.

Stock levels were down compared to a year ago in all regions except Hawke's Bay, Central Otago-Lakes and Southland (see chart below for the full regional figures).

Average asking prices were a bit all over the place though, with the national average asking price in August coming in at $809,417, which was a considerable jump from the July average of $725,006, but still well below the April peak of $874,886.

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66 Comments

This information is not a reliable market indication, because many agents and agencies do not bother listing properties on this site.

The article is only referring to listings on Realestate.co.nz

Does anyone care whether listings are up or down?

It seems like a media beat up to get people to equate prices rising when listings are up.

The major issue for most people who come here is, undoubtedly, house prices.

Many have pointed out, correctly, that these have risen steadily since the lockdown......

Others - bewildered and embarrassed by their lack of both insight and foresight - have been reluctant to accept the facts and have instead resorted to arguing all manner of things, none of them too convincing.

TTP

TTP
Agree with your comments (sadly one of the minority that does).
Yes lots more listing properties.
However, what is telling here is that despite listings being up, stock YOY is down - clearly currently demand seems greater than supply.
Given auction figures showing not only clearance rates high and priced strong, clearly the market is currently very strong.
However, that conflicts with the dire predictions of many on this site are not prepared to accept that.

Top of the morning to you, Yvil.

TTP

Morning TTP, have a great day

Hi Printer,

it would feel be helpful if people referred to a common metric for listings: one that might be useful is new listings per day.
I have compiled this for Hibiscus Coast over last 2 years, monthly.
It ranges from low of about 2.5 per day, up to 8 at peak (usually in Nov-Dec)
It takes a lot of counting which is ok on a small region but a lot more work for Auckland.
From August 10th 2019 to Sept 8th inclusive, HC new listing per day was 3.43.
In a 14 day period of July 2019 it was running at 4.27 and in 2020 this rose to 5.28, a rise of 24%
So, clearly, turnover is up and DTS is down. Total OTM is down but they sell faster.
Listings dropping quite fast at present because being sold faster than being put OTM
In that respect, market is indeed "strong", in HC and probably most other areas of Auckland outside of Manukau, and especially at top end of prices.
In respect to overall sales, that is a different matter. Auckland sales are marginally up (1.7% in 2020) but the lockdown deficit of 1868 (compared to April and May sales in 2019) was only 42% made up for by increased sales in June and July

Hi Mike
The vast majority of people do use a common metric - that is price. It is widely accepted that HPI is the best measure, however, other price data such as as comparison of auction sale prices related to RV etc can also provide some real time indication as to the state of the market.
I see that listings per day to be of questionable value despite you seemingly putting a lot of work into compiling it.
Lots of houses being listed is meaningless; lots of houses being listed and selling is a considerably different market to lots of houses listed and not selling.
Cheers

TTP, you indicated that house prices would fall 12% ...

Sorry, Jimmy, but that's incorrect - and misleading.

Earlier this year, I said that that could fall by UP TO 12 percent - but adding that the recovery would be "faster and more sustained than many here would dare believe".

I still believe a fall in house prices is possible - and that in a worst case scenario it may be somewhere around 10 percent.

TTP

Just looking at the absolute numbers, I would say that 3000+ listings in a month in Auckland is a pretty significant number of new properties in the market for a 1.5 million people city.

This is roughly a house in the market a month for every 500 people, accounting most houses are family households (3+ pp) that means than in one single month more than 1 out of 160 families would need to buy a house every month to make up for those numbers.

Housing shortage? Yet another myth of the lobby's media.

b21: be careful. You have to calculate how many owner occupier households there are and then look at what % of them are sold, pa.
Also have to set how many people per household and answer to that varies depending on input factors you use and how far you dig into HH composition.
That is why some folk say there is a shortage and some say there is not.
Answer is not easy to calculate because census was rubbish in 2018 but it is about 330,000 owner occupier households (using 49% owner occupation figure, which is 4% below what census said and they admitted that their data were not reliable.) There were about 23,000 residential sales in 2019. That is 6.9% turnover.
Except that about 30% of what is on RE NZ is either not built or is a new build. So, that has to be taken into account also.
So, if you remove the stuff an actual home owner is not selling (the 30%) you get about 3740 houses and townhouses in Auckland OTM at present.
Divide that by 330,000 and it roughly gives you what % of OO are selling at any point: 1.1%. Not so impressive is it?

Thanks for your answer Mike.

I do not think the percentage of owner occupied households is that relevant though, eventually the household gets occupied by a family regardless who the actual buyer purchasing the house was right?

Agree census data is not great given its past record, can you share where you are getting this data from?

Hi b21: it is all a bit murky!
Yes, property gets occupied when sold.
But articles on Interest have indicated, a couple of years back (and I would have to dig through a lot of paperwork to find my print out of it) that a large share of new builds are bought by investors to rent out. Which implies that the people renting them are, thus, not owners. So, the popular impression that loads of consents means more stock to own is correct but not quite right - much of what is sold goes on to be rented, not owned by the occupier themselves. Hence, OO % of pop continues to decline, despite all the extra consenting. This is not made plain v often, anywhere.

The census shows how many households they estimate in Auckland.
It is about 330,000.
Problem then is this: the pop of Auckland is STILL an estimate, despite having had a census!
In fact at one point Stats NZ was (pre census) putting out a figure of 1.65m. Then, after census, they revised this down substantially. I read different figures from different sources.
So, I plump for 1.5m.
The next issue, critical to opinions on whether there is a shortage of housing in Auckland, is how many people are there in these households?
In S Auckland it could be an average of 5-7 or more.
In retirement villages it is 2 or under.
And 33,000 are stated as empty , at least most of the time.
So, what people do is use an average. But using 3 per hh gives you a huge difference cf using 2.6 or 2.4.
For what its worth, I do not think there is a shortage of housing in Auckland because the term "Auckland" is far too generic and amorphous and also, the shortage is of good quality reasonably priced places to rent for families. There is no shortage of stuff to buy. Which is why buyers fall in total, year on year, as prices are too high. Hence sales down 27% in Auckland since 2013. This comes down to failure to distinguish between demand for housing (ie numbers of people wanting and ABLE to buy) v NEED, which is all those who need a place to live but cannot get a suitable place at a reasonable rent. need is not met because market wants to build either 4-6 bedroom's things on which developer can make more profit, or boxes of 35m square for folk on their own or whom Auckland Council want to house in brownfield sites. The mansions tend to be on outskirts, where sales are rising year on year, whilst boxes are in AC etc, where decreasing numbers want to live except under 25s and students, or super rich.

The major issue for most people who come here is, undoubtedly, house prices.

Many have pointed out, correctly, that these have risen steadily since the lockdown......

Others - bewildered and embarrassed by their lack of both insight and foresight - have been reluctant to accept the facts and have instead resorted to arguing all manner of things, none of them too convincing.

TTP

Double account?

oops a bit of cut'n'paste but didn't check which account he was using.. LOL

Not at all, I was just quoting TTP
Yes it was 'copy and paste' as it's very tiresome with some of the nonsense sometimes
"Murky", my a#$e

By the way, my figure of 30% of RE NZ stuff being unbuilt or new build is my counting of what is on there - yes, I went through a couple of thousand of newest and oldest to get an estimate of what is not being sold by an actual owner living in it at present. Of the oldest listings, it is 43% not built. Of newest, about 27%. So, my 30% overall is a bit generous to them really. It is v frustrating and annoying that the authorities monitoring listings and sales do not provide granular detail, esp which does not suit their overall purpose. presentation is critical to perception and what media choose to show and state is what they want people to read, NOT what would provide most enlightenment and knowledge

Good comment Mike. I can only go on listings that I look at on TradeMe & there is bugger all going up - apart from Glenfield, which seems to always have houses going on the market (can't imagine why lol).

The rest of central Aukilani has barely a couple of new listings a day (or less) on average (just on my searches - houses with 2+ bedrooms @ <$950K).

From my archive, I note that on August 24th 2019, RE NZ had 29,143 listed for NZ
On August 30th 2020 it was 26,020
That is a 10.7% drop.
A year ago Auckland had 10,591 and a year later had 9871 (- 6.8%)
Auckland houses and townhouse listing year ago was 5429 and now is 5346
When you consider that consents are at record levels, it is plain that Owner Occupiers are not keen on moving.
That is supported by data on how much people are saving recently.

Property at 11 Hayr Road Three Kings sold for $2,900,000 with CV $1,900,000. 1227 square metres of land
It's a multi-unit re-development proposition. No one is going to build a full-size 4 bedroom family home on it. Look at the properties either side. Both have 3 dwellings on them. While there is an ever-diminishing stockpile of older single residences on land greater than 1000 sqm within 5 to 9 kms of Auckland CBD prices will continue to hydraulic higher. Assuming 3 units, a developer has just paid $930,000 for the land for each of those coming 3 units
https://www.realestate.co.nz/3834386/residential/sale/11-hayr-road-three...

ironcast
$1million over CV simply means just one thing - FB getting money out from Hong Kong. CJ099 will tell you. :)

Neighbors clearly show that is at lease a three site development site. Assuming you can put a 250sqm house at $3000-3500 a sqm, you would need a selling price $1.8-2m each just to cover all costs and make some money. Is that were the market is at in Three Kings these days?

Plus, plus, plus ... drainage engineers, design engineers, geotechs, planning consultants, architects, accountants, admin, council fees, lawyers, REA fees, paying off the neighbours for their approval etc. etc.
It's often a very expensive gamble that's not always guaranteed to pay out

That is frothy, $1m for 400 sq/m in 3 Kings.

Being an ex Mt Roskill Grammar attendee, that is ridiculous, do people not understand how nice a yacht you can buy for a million NZ pesos let alone 2 of them millions ?

Being an ex Mt Roskill Grammar attendee, that is ridiculous, do people not understand how nice a yacht you can buy for a million NZ pesos let alone 2 of them millions ?

If it isn't kicking in already, I would say a very nice yacht could be be bought for NZD1-2 mio. You can pitch your offer as low as you like. Ball is in your court.

THAB zoning. Theoretically 5 storeys, but with a site that narrow will be lucky to get 3. Bit of a slope too. Good luck to develop that site and make a good profit. Despite the zoning, 3-4 large 3 storey townhouses would seem to be the best bet. However back of the envelope suggests that in building 3 x 3 bedroom townhouse, a developer would need to sell them for more than 2.5 million each to realise a circa 20% profit!!!! Good luck with that.
Some fool has paid far too much money.

Since this article misses other important information of the report for some reasons, including graphics like property asking price, inventory of listings and property new listings, here is the link for the original report:
https://www.realestate.co.nz/blog/news/nz-property-report-aug-2020

Yeah I'm not sure about this trend of posting articles here, based on other articles on other sites and not even linking back?

There's not even much in the way of commentary by Greg here, just snippets from the original article.

Appreciate there's a timing aspect to this, clearly you want people to 'see it here first folks' - but I come to interest.co.nz for the informed and thoughtful analysis and opinion, both in the articles and the commentary (partisan though it has become recently).

Please, if you're going to blatantly rip of another article - at least link back to it.

Of interest to commentators perhaps, but will this be on news? I doubt it:
https://www.theguardian.com/world/2020/aug/31/new-zealands-astounding-we...

Much more interesting :)

mike
I agree with you.
As a team of 5 million the current level of inequality concerns me; it is not a NZ consistent with my and most people's values.
There is need to address that inequality. As I have previously posted, I see that inequality being traced back to the post Muldoon, Rogernomics economic reset. The Employment Contracts Act of 1991 is just one example of that economic reset, and even today it is not only disadvantages many young wage earners, it has significant consequences for our levels of poverty.
These conditions are unfortunately disadvantaging even the well educated young; I appreciate that it is tough for FHB due to what are typically comparatively low wages and housing affordability issues.
There is need for an economic reset, and while Robertson mentioned this a number of times at the outset of introducing Covid measures, unfortunately I am not currently hearing policy relating to that leading up to the elections. For example, a lack of a CGT promotes inequality and is morally wrong - but no party seems to have the balls to openly adopt it as policy.
For the young FHB, current conditions are a challenge and I wish them well. I find many of the unsubstantiated DGM scaremongering comments on this site serve no purpose and are counter to that; for that reason I am critical of them and have no problem holding them to account - no matter how unpopular that may be.

Thanks Printer.
I appreciate the content you put on and the effort put into it.
Plus you engage in the debate rather than slagging off people with labels.

"provide to their own companies, and transferring wealth to charities which they control but which make little or no charitable donations”.

Ok, who are the lowlifes using a charity for personal gain?

Cheers mike (although we don't always agree). :)

Very hypocritical of you P8, Didn't you mention that your family owns and operates family Trusts to help the wealthy?

No CJ099
Your comment shows a considerable lack of understanding of both the varied nature and purpose of Trusts.
For example, my wife (both our second marriages) has a trust that she established thirty years ago when she was on her own, and well before she met me. Her purpose of that trust was to both record and protect her assets including her home - which was owned in the trust name - prior to establishing a relationship and in the event of subsequent breakdown. I have no problem with that, and for her it was the correct and prudent thing to do.
While I personally do not have a trust - preferring other means - for partners to have property owned in trust in situations of blended marriages is not only about protecting property in a relationship breakdown, but also to protect the interests of the children of the partner who dies first rather than all going to the children of the surviving partner (let me know if you can't think of the implications).
As there is a very high incidence of blended marriages, many of the property owning trusts that you refer to are likely to be in this situation.
Trusts are also used for a variety of other reasons such as when a property is owned jointly by unrelated settlors. For example, for friends or siblings to buy a holiday home together; in this case establishing a trust is being prudent and is appropriate.
Probably all a bit hard for you to understand when you are besotted with conspiracy theories.
So rather than me being hypocritical, it is more a case of your ignorance.
Cheers

P8 hypocritical waffle, We all know that Trusts are mainly used for Tax avoidance and the like (hiding money from your children) even the Guardian article that you were originally comment on state that. Oh and don't forget how Trusts are used for Overseas Investors for purchasing property by the back door to avoid the foreign buyers ban.

Herald article: Overseas investor fined $500k for buying property without OIO consent. "The shareholders of Chor Ltd, Zhou and Zhou, first bought the property in 2013 for $2.55m. They later sold the property to Chor Ltd (as trustee of Chor Trust) for $3.2m. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=123...

CJ099
You really do dig your self a deeper hole ;)
1. You really don't understand . . . . Trusts are not tax avoidance advantageous. Trusts are taxed at the maximum marginal tax rate 33% - so absolutely no reason to set up a trust to avoid paying tax on income such as rent.
2. Really don't understand - as you suggest - as to how a trust is about "hiding money from your children". Very strange comment I would love you to explain (and especially so as from Jan 2021 when all beneficiaries of a trust need to have disclosed details of the trust).
3. No problem with overseas buyer being picked up as they should be - but a nail in the coffin of your arguments :) This example clearly illustrates that the legislation related to anti-money laundering and foreign buyers is actually working but you are dismissive of. It is not surprising that given the multi-layering of compliance required by banks, lawyers and real estate agents is working. You may also have noticed the number of gangs being now being prosecuted and assets confiscated - that is not initiated by new police inquiries but rather illegal funds being identified through the requirements of the new legislation.
Just keep digging that hole.
Cheers :)

LOL P8 You just keep ignoring the evidence don't you, even when NZ is having to strengthen the Trusts Act 2019 will come into force on 30 January 2021 because its not effective enough. :)

Oh and a tip for you and your wife P8, If she's looking to protect her assets effectively from you, since you mention she established a Trust "In the even of a subsequent breakdown".
Trusts do not effectively protect in that way (NZ laws were changed a few years ago under Labour), So they're just another asset really. What she really needs is a "Prenuptial Agreement" you can even set these up whilst you're in a marriage as an "Contracting Out Agreement" where you can legally setup a document using a Solicitor to decide what is yours and hers. :)

Do you have a Trust CJ099 ?

No, I don't and have no need for one thanks. I have no intention of defrauding IRD or hiding my assets. :)

CJ099
Told my 94 year old mother what you have previously said about those who have trusts.
Most would describe her as a very polite, very sweet and very proper lady. However, her comment in response to your assertion made me blush, and certainly is not fit to post here.
Cheers :)

Oh you are good for a giggle P8. It's nice to hear that you live with your mother. :)

CJ099
I also meant to comment that she is not in receipt of the residential care subsidy and was never ever likely to be so.
Me, not in residential care with her yet.
Roger, over and out. :)

Just to correct your comment / help you out re "Prenuptial Agreement" and"Contracting Out Agreement"
It is actually called a "Relationship Property Agreement".
So no worries there :)

P8 It's actually all part of the same thing and has many references: "Contracting Out" also known as “prenuptial” agreement and “pre-nup”. Though your wife shouldn't be worried too much since Labour also made the changes to the NZ divorce law to be more favorable for women especially with children, so she'll probably get the lions share anyway. :)

https://communitylaw.org.nz/community-law-manual/chapter-11-relationship...

Double post

To simplify things - in a Nutshell the never-ending debt growth has kept the Boomers in a delusional state since they entered the workforce at the same time that the US went off the gold standard. They were first in on a massively successful pyramid scheme and now they want the Millennial generation to buy their inflated assets.
Will end in tears - the end.

Good article find Mike! Like I've been pointing out all along, the vast majority of high priced property particularly in Auckland (And probably Queenstown too), are being bought up through Trusts you can even see it on websites such as Oneroof in the Suburbs property ownership info.

Of course it won't. Most kiwis turn a blind eye to this. Even our so called left leaning government has done little that is meaningful to address. Style over substance.

Well there are the key changes to the new Trusts Act 2019 will come into force on 30 January 2021. This is the first major reform to trust law in New Zealand which provides greater transparency of trustee activities and increased trust compliance requirements.
So that could shake things up a bit particularly for offshore owners.

Absolute beat up of a story by an academic who doesn't understand how tax in NZ works. The trustee tax rate is the same as the highest personal tax rate - 33%, so voila no special trust tax rate. 33% income tax is what every NZ trust pays that hasn't allocated income to beneficiaries. If income is allocated to beneficiaries then they have to receive it and return it for tax. There is no magical superpower about trusts. It's not a big deal if wealthy people personally don't earn over 70k. Their investments are typically not held personally, but are owned and taxed in other entities be it trusts, companies or PIES, that pay income tax. They will be paying tax at 28% or 33%. You can't avoid income tax in NZ.

These figures, highly provisional at present (many sales still to register before REINZ puts out official stats) for two bifurcating price brackets sales in Auckland in August. The % change will alter by time REINZ figures are issued but the differential trend will v likely NOT alter:

August 2019 v 2020: over $1.5m: down 17%
August 2019 v 2020: 650-850k: down 61%

As I reiterate, the % change will alter a fair bit but the differential by bracket won't.
The lower bracket in particular is contradicted regularly in MSM, who continue to valorise rise in FHB.
That may be so in rest of NZ but it isn't in Auckland.

What do the lower volumes actually mean for the market? I've seen a lot of posts about decreasing sales volumes over the last year or two but they don't seem to have any correlation to prices, so I'm curios as to why it keeps getting brought up other than as a mild curiosity?

"What do lower sales volumes mean for the market"
A market consists of buyers and sellers and a price.
If the numbers of buyers keeps falling, then by definition the "market" is shrinking.

But the other article on interest today said listings (stock) was down... Perhaps we are running out of sellers, not buyers?

A bit of detail re increased sales in June and July and contrast to 2019, in Auckland.
In April and May 2019 Auckland sales were 3738. In 2020 it was only (lockdown) 1754, a net loss of 1984

In June and July 2019, sales rose to 3870 (up 3.5% on April/May total)
In June and July 2020, sales rose to 4713 (up 268% on April/May total) (making up 843 of April/May loss)

Hence "blowing off pent up demand"

The lockdown loss was partially made up for by gains in June and July, but only 42.49% of it.

As a precursor for August REINZ, note that August 2019 sales were 1812.
To fully make up for April/May loss, August sales would have to reach 2953 (or a rise of 63%)
This is highly unlikely

Landlords are still stuck with their current tenants due to the eviction freeze, the surge of listings will come once landlords can get the tenants out and put their houses on the market.

I thought that is over now

Does interest.co.nz not report on Corelogic data out today?

This morning I had coffee with a couple of agents (uni mates) post lockdown in Auckland. They have been busy booking in appraisals now that level 3 is done. With the market being steady up here and the election moving to Oct more sellers are coming on board so supply will increase in September

They are saying the market feels panicky now with buyers worried about their pre-approvals not being renewed and making more pre auction offers just to secure something

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