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Supply may be catching up with demand in Auckland's over heated housing market but there's still a shortage of stock in other regions

Supply may be catching up with demand in Auckland's over heated housing market but there's still a shortage of stock in other regions

The number of residential properties coming on to the market hit a five year high in January.

Property website Realestate.co.nz received 8048 new residential property listings from throughout the country in January, which was up 10.2% compared to January last year and the highest number of new listings the website has received in the month of January since 2016.

The rise in listings was mainly driven by a surge of 3139 new listings in Auckland, which was up a whopping 37.4% compared to January last year and the highest number of Auckland listings the website has received in the month of January since 2010.

New listings were also up strongly compared to a year ago in Taranaki, Wairarapa, Marlborough, Otago, Central Otago/Lakes and Southland, while many other regions had significantly less listings in January year-on-year.

The biggest decline in new listings occurred in Gisborne where they were down 17.2% compared to a year ago, followed by Hawke's Bay -13.8% and Manawatu/Whanganui -10.1% (see table below for the full regional breakdown).

Although new listings were up overall in January year-on-year, the total number of residential properties available for sale on Realestate.co.nz at the end of January was down 20.6%.

That suggests demand for properties is still outstripping supply and the market remained in extremely buoyant mode at the start of the year.

The second table below shows how stock levels in all regions at the end of January compared with those at the same time last year, and the figures which stand out the most as an exception are those for Auckland, where total stock levels were down just 2.5% compared to a year ago.

That, combined with the high level of new listings occurring in Auckland, suggests the balance of supply and demand in Auckland may be close to getting back into some sort of equilibrium.

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New Residential Listings Received by Realestate.co.nz
Region January 2020 January 2021 % Change
Northland 314 314 0.0%
Auckland 2285 3,139 37.4%
Coromandel 117 112 -4.3%
Waikato 544 517 -5.0%
Bay of Plenty 469 463 -1.3%
Gisborne 58 48 -17.2%
Hawke's Bay 253 218 -13.8%
Central North Island 119 114 -4.2%
Taranaki 154 184 19.5%
Manawatu / Whanganui 376 338 -10.1%
Wairarapa 84 101 20.2%
Wellington 628 601 -4.3%
Nelson & Bays 155 152 -1.9%
Marlborough 72 90 25.0%
West Coast 55 65 18.2%
Canterbury 1040 944 -9.2%
Otago 238 275 15.5%
Central Otago / Lakes District 151 195 29.1%
Southland 191 178 -6.8%
All NZ 7303 8,048 10.2%

 

Total Number of Residential Properties Available for Sale on Realestate.co.nz
Region January 2020 January 2021 % Change
Northland 1221 766 -37.3%
Auckland 7061 6883 -2.5%
Coromandel 450 250 -44.4%
Waikato 1433 947 -33.9%
Bay of Plenty 1230 776 -36.9%
Gisborne 97 79 -18.6%
Hawke's Bay 424 298 -29.7%
Central North Island 315 208 -34.0%
Taranaki 357 275 -23.0%
Manawatu / Whanganui 654 400 -38.8%
Wairarapa 171 111 -35.1%
Wellington 840 704 -16.2%
Nelson & Bays 356 227 -36.2%
Marlborough 238 172 -27.7%
West Coast 320 213 -33.4%
Canterbury 2928 1865 -36.3%
Otago 440 432 -1.8%
Central Otago / Lakes District 593 584 -1.5%
Southland 359 290 -19.2%
All NZ 19488 15480 -20.6%
Note: Numbers are at the end of each month.    

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44 Comments

Well, turnover must be high then.
2 weeks ago, the 7 suburbs of Hibiscus Coast that make up 90% of its listings, had 295 listed.
Today it is 300.
Red Beach listed one property in last week.
January 1st the total was 253, so it is up 18.5% since then.
Of those listed 40 are not built in Silverdale.

I know people who are 'having a go" to see if they can get a really high price in this frenzy. If they get a ridiculously high offer they will sell.

Sell and go where?

That doesn’t make any rational sense.

Having a go at selling their only or their second or 3rd property? and where to put the cash... in a term deposit?

Oh where to put cash. Children's banks accounts so they can buy thier first home.

careful. If your 18 year old son lives with his predatory girlfiend for 2 years she will be entitled to half the balance. Putting houses into childrens names can be even more problematic for the same reasons. Beware!

They will downsize out of Auckland, or move to Brisbane where houses are 300k less.

Why would anyone over 40 want to live in Auckland unless they had family there or for work reasons?

Depends which part you live in. I have a choice of six places to windsurf depending on the wind. Places like the Naki can’t compare. I wouldn’t leave Auckland for any reason.

I think you will find the Naki is famous for windsurfing and surfing. And you don't need to drive an hour (or more) and carry your windsurfer 800m from your car park that you took 20 min to find. What are the benefits of living in Akld?

none

Compared to where? Auckland is a stunning place to live. Better than anywhere else I’ve experienced and I’ve lived in many places.

I have also lived in many places including Auckland for 20 years. Yes, it has a stunning harbour but I cannot see anything else it has going for it except if you are young and want to party or make money. Traffic is unbearable, the people generally stressed, rushed and unfriendly and parking is a nightmare.

Told you so

Medical specialist access. NZ Dhbs are not equal and many conditions only have specialists or access to treatment & surgeries only in Auckland. In fact even in immunology and neurology the specialists for many conditions are only available up in Auckland the rest of the country does have to travel up there regularly if they need appointments, treatment etc and specialists are rarely shared between Dhbs. If you are concerned about your health in retirement and would like to prepare for common conditions associated with ageing pick a Dhb that can provide the best access to treatment for those conditions. Differences between regions can be deadly e.g. Southern Dhbs cutting off serious joint surgeries and bowel treatment.

There are lots of older types now coming to this position. Auckland suburbs are packed with people approaching or just past retirement, all sitting on large family homes. We have a large boomer population.

Investors selling part of portfolio to lower debt/risk?

25% or more of what is listed on RE NZ are not built yet.
It is likely that much of that stock that does sell, is being bought by investors to rent out.
At some stage, given lack of sufficient supply, there will be a drying up of stuff to sell that is built.
That of course shrives up price of whatever is decent, that comes OTM.
That decent stuff is selling 20% or more over CV but rest of stock is not, not in Stanmore Bay at least.
Sales are in bands, 5,11,19,30% + over CV, all resting on whether it has over 800m square and a view.
If not, then not attracting high bid offers.
Averages on prices rise in Auckland are highly misleading.
Did a sample in Torbay of sales in last 5 months and average of 30 properties was only 7% over CV

Not sure why & how you can deny the market is hot with the majority of stock selling for crazy prices. If we're talking torbay check out 4 infidel place - sold $1,330,000. A quick scroll through sold in Torbay also seems to resemble this https://www.interest.co.nz/property/residential-auction-results?region=A...

I’m not sure what he’s on about as well. Stuff around us is all pre auction offers and auctions brought forward. They all go in a week and miles above any “CV” which is completely out of date

Does that include sections?

There's an avalanche of new builds coming to the market, and even more in the months to follow given the recent numbers in build consents. Most of these builds are targeting investors, at a time when many will be pushed out of the market due to the new LVR restrictions. Building at a rate of over 1000/month just in Auckland with no immigration and almost no population growth the so called shortage is shrinking fast yet all builders want their part of the cake. Number of returning kiwis is low and does not compensate the lack of immigration. Wait and enjoy the view.

Are you seriously trying to tell us the supply imbalance is suddenly going to turn into an over supply in the next few months?

There will be an oversupply in some segments of the market yes. Westpac economists supported this earlier this week. There is already an oversupply of apartments and overpriced investment properties (aka old sheds with potential), so this should not come as a shocker to be honest.

Interesting. I'm also of the mind the market is primarily driven by monetary & taxation factors, supply/demand is sort of steady. Could easily see an oversupply situation occurring with no immigration. Could make things interesting.

This is what will cause the bubble burst. However, it does depend on whether or not they ramp up immigration if the Covid situation improves.

And how devastatingly shocking it will be for those affected and caught 'at the top' with their recent FOMO purchases." Thanks, Jacinda", they'll say. "Thanks very much"

Totally agree that it will be reflected in the polls. Seeing stats on the different voting segments and whether or not they own houses would be interesting.

They might blame JC, but they also need to reflect on their hubris as well.

When prices are rising - it's all Good Management.

When they fall - it's someone else's fault.

"Thanks, Jacinda", they'll say. "Thanks very much"

I dont agree with the reasoning however the turn of phrase is well put. Very good

More than 700 on sale already as we speak. Will be interesting to follow these two numbers.

https://www.trademe.co.nz/a/property/residential/sale/auckland/auckland-...

throw in to the mix the govt funded trades programme which should start churning out new builders, electricians, plumbers etc... Plus the review in to the price of building costs. The future is still uncertain, however the longer the border is shut the more likely supply will meet demand and more...

Seems to me there is a bit of a trend in that the areas with large +ve jumps in new listings are the areas possibly the most affected by the border closure with tourism and student numbers reduced. Only exception to that is Taranaki but I think that is industry driven - heard a couple of weeks ago Waitara Valley methanol plant is shutting down, which is a bad sign for Motunui.

There is an historical high rate of new builds that has been at near peak for a for few years now. Years prior it was still high vs historical averages. With borders shut we will likely over build. Apart from the massive amount of infill projects everywhere, check out the size & number of new developments around Akl. I've not seen a building boom like this in the past 20 yrs.

This is what I call a good demand - supply behaviour. When buyers are ready, sellers will naturally provide.

It's when buyers aren't ready (no money, but wants their own house) that a phoney demand supply issue occurs.

Saying that, the average FHBs have only 15 days to secure a home their own before it becomes a dream- be quick and decisive. Nitpicking will backfire with hard consequences for years to come.

It should be, good supply to equal demand, and if that happens prices do not rise due to any lack of or oversupply.

We don't have that, either on the way up or down in NZ due to the Govt. policies that won't allow a balance between demand and supply to exist.

It wouldnt hurt everybody if prices fell or eased. How much of the total housing stock has traded since the Auck median went from 830 to 1030 ?, probably less than 2%, so really very few homeowners would be affected if lets say it went back to 830k.

You cannot engineer a deflation to control prices without introducing instability. When market participants primarily consists of major banks and financial institutions, that instability can easily overturn the NZ boat especially when all market participants had already priced in their expectations.

Some policies sound really nice and popular on paper but it may just be the very lever to bankrupt an entire sovereign country.

You cannot engineer an inflation to control prices without introducing instability. When market participants primarily consists of major banks and financial institutions, that instability can easily overturn the NZ boat especially when all market participants had already priced in their expectations.

Some policies sound really nice and popular on paper but it may just be the very lever to bankrupt an entire sovereign country.

Fixed that for you.

BL, Chch had excess supply for a while and stable property prices and rents. Now everything is changing and going up fast, so what to do

Good time to cash out and reduce debt. Yield math will never be better than it is now with lowest rates in history.

Stock numbers have crashed in Tauranga. When I started looking a year ago it was nearly 1100 and today on Trade-Me its 440. Just about everything now going to Auction, no surprises there in this market.

Whats going on... seriously out of whack. Lack of supply is only encouraging speculators as they know this will go one way, then once its up its very hard to reverse.