The rest of New Zealand's property market is following Auckland in turning into a sellers' market as the level of houses for sales drops toward its long-term average, property listing website realestate.co.nz says.
In the site's latest monthly property report, CEO Alistair Helm said inventory of properties for sale in June fell 10% from May, following rising levels of sales and fewer new listings.
Inventory levels were down 18% from June 2010.
"The shift in the market that was seen in Auckland last month is now being reflected in other main centres of Wellington and Otago, as well as the regional centres of Bay of Plenty, Queenstown, Waikato and Nelson," Helm said in a media release.
“These are regions that have not been sellers’ markets for a very long time. If things continue, it’s likely that we will see a shortage of listings to meet buyer demand grow even further," Helm said.
Meanwhile, as housing stocks had fallen, the average asking price had remained steady at NZ$415,053, up slightly from NZ$414,308 last month, and down 2% from earlier this year, Helm said.
“Although we are now clearly heading towards a sellers’ market in New Zealand, the steady asking price shows vendor confidence is strong, but not excessive," he said.
The figures in the June Property Report were similar to the trend that occurred when the property market responded to economic pressures following the onset of the global financial crisis in 2009, Helm said.
“The country is now delicately poised on the long term average of inventory, and an ongoing shortage of available properties looks very possible,” he said.
See Helm's commentary below:
What began last month as an early trend towards a sellers market has taken on a faster pace through June. Nationally whilst the inventory levels hover just above the long term average of 41 weeks, key regions of the country are now firmly set in a sellers market. This situation has the potential to be exacerbated by the traditional reluctance of property owners to list their homes through the winter period. During the winter, sales per month tend to drop by around 5% as against a normal month, however new listings tend to fall more significantly by up to 15% as compared to a normal month.
Heading into the winter period with a growing number of regions seeing inventory levels below long term average could well result in elevated buyer demand with a potential to see property price appreciation. Those regions are Auckland, Queenstown, Bay of Plenty, Waikato and Otago.
Countering this potential for price appreciation is the fact that in June the asking price expectation of those new listings coming onto the market at $415,053 showed no change as compared to May and in fact represented a 2% fall in price as compared to the recent 3 month period.
Asking Price
The truncated mean asking price for all new listings in June rose very slightly from $414,308 in May to $415,053. On a seasonally adjusted basis the asking price rose just 0.8% in the month indicating a degree of caution amongst sellers.
The overall trend of the past 2 years continues to show a slow but steady strength in asking price expectation.
New Listings
The level of new listings coming onto the market in June fell again to 9,111. This represented a 18% year on year decline but a 2% seasonally adjusted rise from May.
On a 12 month moving basis the number of new listings in the past year totals 125,848 as compared 145,920 for the same period a year ago – a fall of 14%.
Inventory
The level of unsold houses on the market at the end of June continued to fall from prior months. June reported 47,738 down from 48,352 in May and 50,398 in April.
The recent relative strength of sales as seen in March through to May 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.
(Updated with commentary, link to property report)
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