By Bernard Hickey
Realestate.co.nz listings data showed the number of unsold properties reached a near-record 53.1 weeks of sales in March.
Yet asking prices rose slightly and the number of new listings rose 9% on a seasonally adjusted basis in March from February.
"Given this high level of inventory, matched to slow levels of new listings, it is becoming clear that the high asking price is more likely to be the result of keen interest focused purely on new listings, leaving older listings somewhat “languishing on the shelf” at what could be unrealistic prices or presentation that needs refreshing to attract buyers," Realestate.co.nz said in its monthly report published at Unconditional.
"The key driver of this rising inventory is more a reflection of somewhat lacklustre sales than excessive new listings. The absolute level though at over a year of equivalent sales will continue to impact the market and maintain the “buyers-market” perspective," it said.
Realestate.co.nz said the truncated mean asking price for all new listings in March rose to NZ$421,940 from NZ$420,265 the previous month. The trend of the last two years is of continued strength in asking price expectations.
New listings rose 9% on a seasonally adjusted basis and the 12 month moving avrage of new listings was 131,722. This is down 6% on the previous 12 months. Sales in February totaled 4,502.
Asking prices were strongest in Auckland and Wellington, while asking prices fell in most provincial areas, with Northland and Marlborough hardest hit.
Realestate.co.nz said activity in Christchurch had been resilient despite the earthquake.
A total of 1,297 new properties came onto the Canterbury market in March, which was down 36% on a year ago.
“Property is still being listed, marketed, viewed online, researched, enquired about, negotiated and sold,” he says.
The average asking price for Canterbury homes was also resilient, with the truncated mean asking price falling 2% from the previous month, to NZ$357,986.
'Prices to rise 3%'
Meanwhile, ASB economist Chris Tennent-Brown said the stronger new listings was a positive for the market. He noted that relatively subdued inventory levels showed the market was in better balance than it had been in the pit of the recession 2008 when prices fell 9%.
The figures showed the Auckland and Wellington markets were tighter than the rest of the country, he said.
"The Auckland market remains tight relative to the rest of the country, with Auckland accounting for around 25% of New Zealand’s listings, but 35% of the turnover at present, and only 8 months of inventory based on the current rate of sales. Wellington is even tighter, with a ratio of 6," he said.
"A contained level of inventory, positive migration and population growth, as well as the recent drop in interest rates are all positive for the property market over the year ahead," he added.
"We expect nationwide prices are troughing out now, and should increase by around 3% over the year ahead. Behind this lift will be a range of experiences, from stronger price appreciation in areas such as Auckland, and ongoing weakness in areas where population and income growth are less supportive."
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