There's both good and bad news in the latest housing market figures for May.
The good news is sales numbers were reasonably strong last month, with the Real Estate Institute of New Zealand reporting 7166 sales for May.
That's up 8.9% compared to May last year, and the highest level of sales for the month of May since 2021.
So buyers were about and they were prepared to commit to a purchase.
Vendors were also active, with property website Realestate.co.nz reporting 9489 new listings in May.
That's up 2.9% compared to May last year, and was the highest number of new listings Realestate.co.nz has received in the month of May since 2018.
The relatively high new listings numbers were both good and bad news.
Good, because it gave buyers plenty of fresh stock to choose from, making it more likely they would find the property that suits them and conclude a purchase.
It was bad in the sense that the market was already overstocked and a rush of additional listings added to that problem.
That meant Realestate.co.nz had total stock of 34,415 residential properties available for sale at the end of May.
That's down for the second month in a row from 36,870 at the end of March, but stock numbers would normally start to decline as the market left the peak summer months behind and headed towards winter.
However, the amount of stock for sale at the end of May was up 5.6% compared with May last year, and was at its highest level for the month of May since 2014.
By way of comparison, the last time stock for sale levels were about as high as they were last month was in May 2015, when Realestate.co.nz had 33,598 residential properties for sale, down 2.4% compared to last month.
However, in May 2015 the REINZ reported 7952 sales, 11% higher than the 7166 sales reported by the REINZ in May this year.
That suggests stock levels remain too high compared to the level of sales being achieved.
That is also showing up in the stock overhang figures, which are the number of properties left unsold at the end of each month.
There was an overhang of 28,758 properties at the end of May this year, the biggest overhang in the month of May for 10 years.
That overhang would have been even bigger, but for the 3832 residential properties interest.co.nz estimates were withdrawn from active sale in May.
All of which adds to the good news for buyers. They now face a market with plenty of stock to choose from keeping downward pressure on prices, allowing them to take their time finding the place right for them and then bargain hard on price. At the same time as mortgage interest rates have been falling.
Vendors are facing a bit of an uphill slog though, and those who don't meet the market on price are likely to be left disappointed.
3 Comments
to repeat my oft-made comment - an issue is the number of new homes on offer - especially in Auckland. When you are selling 10 townhouses you only list 3 or 4. So the 4,000 new homes listed on trademe for Auckland (up from 3,000 at the start of the year) means that there could be 8,000 more homes than REINZ estimates.
And that is a further factor why I believe Auckland will take longer to see price increases - because of that and the continuing supply. And Wellington in comparison is about 250 new homes listed - so a lot less exposure
Anything to do with the fact that people realise these new builds are poor quality, no outdoor space, no car parking…..
Prices stiil too high. Obviously developers and others who hold these properties have have lots of spare cash to sustain unsold properties. Either that or they are burning up interest payments in the hope the OCR will fall at least 0.5% in the next six months or so enabling prospective buyers to fall in the price range they are now asking.
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