High stock levels and large number of properties being withdrawn from sale suggest buyers remain firmly in control of the housing market

The housing market ended winter in a soggy state and September will likely be pivotal in determining how it shapes up for the rest of the year.

Sales and prices both declined in August, while stock levels remained high.

The Real Estate Institute of NZ reported 5866 sales in August, down 11.1% compared to July while the national median price was down 1.2% for the month.

Property website Realestate.co.nz had total stock of 30,000 residential properties available for sale at the end of August.

That stock level has declined for five consecutive months since it peaked at 36,870 in March, which is traditionally the busiest month of the year for the housing market.

However, that appears to be a normal seasonal trend, with stock levels usually coming down from their summer peak over autumn/winter.

The 30,000 properties for sale at the end of August this year was up very slightly (1.4%) from 29,579 at the end of August last year. But more importantly it was up 31.9% compared to August 2023 and was at a 10-year high for the month of August.

So while there have been seasonal variations in stock levels over the last 12 months, they remain at very high levels as we head into spring, meaning buyers will continue to have plenty of choice.

Figures for the overhang of unsold properties at the end of each month have followed a similar trend.

Interest.co.nz estimates there was an overhang of 24,600 unsold residential properties at the end of August.

That figure has declined for four consecutive months since peaking at 30,400 in April. However, that also appears to be just a seasonal variation.

The 24,600 overhang at the end of August this year was practically unchanged from the overhang of 24,700 at the end of August last year, but was up a whopping 39.7% compared to August 2023.

The number of properties being withdrawn from sale each month tell a similar story.

These include properties that have been formally taken off the market and those that may still be listed with an agency but are no longer being actively marketed - they are just sitting on the agency's books unloved, unwanted and gathering dust.

Interest.co.nz estimates 3300 residential properties were withdrawn from sale in August. And that figure has declined for three consecutive months from 3800 in May (-13.1%), but was up by 10% compared to August last year and up by a staggering 57% compared to August 2023.

Anecdotal evidence suggests most of the properties being withdrawn from the market were owned by vendors with unrealistic price expectations compared to current market conditions.

All of these figures suggest that the buyer's market that has persisted through autumn and winter is likely to continue into spring.

The one figure that showed substantial movement in August was the number of residential properties coming onto the market.

Realestate.co.nz received 8769 new listings in August, up 13.3% compared to July, up 9.0% compared to August last year, and up 17.8% compared to August 2023.

So unless there's a substantial jump in sales in September, the housing market pendulum is likely to swing even further in buyers' favour for the start of the spring selling season.