A sluggishness in new property listings in Auckland is turning the market in favour of sellers, as the national housing market continues its 'two-speed' trait of Auckland outstripping the rest of the country in terms of activity, realestate.co.nz says.
In its latest NZ Property report covering May, realestate.co.nz also said the average nationwide house sale asking price for new listings fell 4% in May from April's record high of NZ$429,249 to NZ$414,308. Nationwide inventory levels - a measure of the stock of unsold houses on the market - fell 12% in May from April to 47 weeks worth of unsold property.
"The prolonged sluggishness of new property listings, which has been evident for nearly 2 years, has at last seen a tip in the balance of the property market from favouring buyers to favouring sellers. At least that is now being seen in two of the major markets around the country – Auckland and Queenstown lakes," realestate.co.nz chief executive Alistair Helm said.
"The Auckland market, which saw strong late summer property sales, has now as a consequence of these sales, matched to the slow flow of new listings, seen inventory levels below long term average. At the end of May the inventory of unsold houses on the market fell to 30 weeks as compared to the long term average of 34 weeks. The last time this level was seen was at the end of 2009," Helm said.
The asking price expectation of the new listings coming onto the market in May fell back from the peak seen in April.
"Historically there is always an adjustment seen at this time of year. The seasonally adjusted asking price fell 2% [unadjusted: 4% fall] nationally and that was reflected right across the regions indicating that the market still senses no significant property price inflation as yet with new-to-the-market vendors pricing to attract buyers who are still small in number across the regions," Helm said.
New listings in May down 16% yr/yr
The level of new nationawide sale listings coming onto the market in May fell by an unadjusted 3% to 9,898 from 10,181 in April. This represented a 16% year on year decline but a 1% seasonally adjusted rise from April, Helm said.
"On a 12 month moving basis the number of new listings in the past year totals 127,843 as compared to 144,375 for the same period a year ago – a fall of 12%," Helm said.
The level of unsold houses on the market at the end of May continued to fall from prior months. May reported 48,352 unsold houses down from 50,398 in April and 51,980 in March.
"The recent relative strength of sales as seen in March and April has now stared to see a clearing of what has been a high level of unsold houses on the market over the past 18 months. Heading into Winter, a time of traditionally weaker listing will likely see this inventory level fall further in coming months," Helm said.
Auckland & Queenstown vs the rest
There was a level of confidence in Auckland from sellers that had not been seen in a long while, Helm said.
"The cyclical trend we saw following the impact of the global financial crisis in winter 2009 is balancing out and normalising the property market again to some degree,” he said.
If current trends continued in Auckland, the region could see a shortfall in new listings emerging over the winter period.
“It is common misconception that property sales go quiet as winter approaches. While new listings do tend to drop away, people are still enthusiastically looking for and buying properties," Helm said.
"While the steady shift out of excessive levels of national inventory is giving vendors the upper hand in Auckland and also Queenstown, 10 of the 19 regions are still predominantly favouring buyers for the time being," he said.
“We are clearly seeing a ‘two-speed’ property market in New Zealand at this time, with Auckland leading the rest of the country in levels of property activity."
'Prices troughing out'
Commenting on the figures, ASB economist Christina Leung said while new house listings looked to be slowly coming onto the market, the improvement in housing turnover meant the total level of housing inventory remained contained.
"As a result, house prices continue to hold up reasonably well," Leung 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," she said.
"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."
(Updates with ASB comment, more from NZ Property report)