January might be the start of the calendar year and the time when the business world heads back to work, but it's not a particularly good month for trying to pick where the housing market is likely headed for the rest of the year.
That's because the real estate industry remains in its Christmas/New Year slumber for the first half of the month, when virtually nothing happens. This is why January is usually the slowest month of the year in terms of sales.
Even so, it's probably worth having a look at the month's trading numbers to see what we might glean from them about the likely trading patterns over the next few months.
The first thing to look at is sales volumes.
The number of sales is by far the most important indicator of market health. Much more so even than price, although prices get far more attention in the public arena.
It's sales volumes that are the main determinant of industry revenue and keep stock flowing through the market. And January's sales weren't too bad, for a January.
According to the Real Estate Institute of New Zealand, there were 3774 residential sales in January. This was up 17.5% compared to January last year, and was also the highest level of sales for the month of January in three years. However, there's still quite some way to go before they get back to the pre-Covid level of January 2019 when there were 4459 sales.
The really big activity in January is listings, as vendors sign up with agents and get their marketing plans underway ready for the big sales months of February and March, usually the busiest months of the year for residential real estate.
And last month's listings didn't disappoint.
According to Realestate.co.nz, 8904 residential properties were listed for sale in January, up 21% compared to January last year.
That was the largest number of new residential listings to have come onto the market in the month of January in the last 10 years.
That pushed the total stock of residential properties available for sale at the end of January to 32,412. That was up 19% compared to January last year, which also puts it at a 10 year high for the time of year.
That in turn pushed the overhang of unsold properties at the end of January up to 25,704, or 19%, compared to a year earlier.
That mountainous stock of unsold properties would have been even higher were it not for the 2196 properties interest.co.nz estimates were taken off the market in January, up 21% compared to January last year.
That's the highest number of properties withdrawn from sale in the month of January for six years.
That leaves a lot of grumpy vendors sitting on the sidelines, waiting for the market to finally wake up to what their property is really worth, so they can receive the money they deserve for it and indeed, are properly entitled to.
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