The housing market is heading into winter with a huge overhang of unsold properties, even though the number of properties being withdrawn from sale is also rising.
Interest.co.nz estimates there was an overhang of just over 28,000 unsold residential properties on the market at the end of April.
The overhang is the number of properties remaining unsold after they have been on the market for at least a month.
April's overhang was up 2.9% compared to April last year, and up 16.6% compared to April 2024.
The overhang is now the biggest it has been in the month of April since 2014.
By way of comparison, at the peak of the last housing boom in 2021, the overhang got down below 5000, so it has increased more than fivefold since then.
The increase in the size of the overhang is occurring even though more vendors are taking their properties off the market after they fail to to sell.
Interest.co.nz estimates there were almost 3200 dropouts from the market in April, up 4.7% compared to April last year.
Dropouts are the properties that are completely taken off the market in a month, plus those that may technically still be for sale, but are no longer being actively marketed, usually because the agents involved have given up on them as a lost cause because of the vendors' unrealistic price expectations.
Interest.co.nz's believes its estimates of both the monthly overhang and the dropouts are conservative, so the actual numbers may well be slightly higher.
The timing of the latest figures is a particular concern, because it comes on top of numbers that were already extremely high, and both tend to increase further over the winter months when sales numbers traditionally decline.
The bright spot in all of this is that it's good news for potential buyers.
They will literally be spoiled for choice, with the market pendulum swinging even further in their favour.
However, vendors might be facing a very chilly winter this year.
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13 Comments
I think it will be chilly for NZ in general. Even before the Iran stuff any economic recovery in NZ seemed to have stalled. Now we need an OCR decrease again but it can’t happen due to inflation
The permafrost chill of 6% plus debt funds, are comming soon.
US30Y 5.122 this am, now 5.15%
Japan's coastal towns have outdoor speakers that warn of potential tsunamis after earthquakes warning people to move to higher ground (most of the time they never happen).
You can argue that we've been coaxing the sheeple for so long that we run the risk of the Ponzi being swamped or at least flooded. I think many will believe that it's like the boy crying wolf and that we shouldn't stray too far from prophets such as Ashley Church (his disciples can be found at every water cooler, BBQ, and sports club across the nation).
Winter is coming and leverage works both ways.The over leveraged specuvestor will be frozen in place. Will things warm up again... or get worse.
Dropouts are the properties that are completely taken off the market in a month, plus those that may technically still be for sale, but are no longer being actively marketed, usually because the agents involved have given up on them as a lost cause because of the vendors' unrealistic price expectations.
Interest.co.nz's believes its estimates of both the monthly overhang and the dropouts are conservative, so the actual numbers may well be slightly higher.
So do you want to sell or not?
If you really want to sell.......list at 2015 prices.....before these buyers are fully soaked and only 2010 buyers remain ready and available.
The Dropouts, will be low prices takers, very soon.
I want my...I want my ....Tax Free gains (cue crying noises)
Dire straits indeed
Oh, that ain't working, that's the way you do it
Got your money for nothing, and cap losses tax free!
Apparently NZers are not interested in living in scrappy little units with nowhere to put the car. Who'd have thought? ...
Christchurch townhouse boom seeing half-finished developments across city https://www.rnz.co.nz/news/business/595528/christchurch-townhouse-boom-…
We restricted housing supply to create an inelastic market during a period of high demand and this caused house prices to soar. Now we have low demand and prices are crashing.
We could solve the problem by derestricting supply, but NZ politicians exist.
Yes. A browse thru the Pecuniary and Other Specified Interests of Members of Parliament clearly highlights that unfortunatly. Even Helen Clarke has houses stacked deep.
NIMBY say no
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