Realestate.co.nz says property listings and asking prices surged in May; Inventories well below average in Auckland and Christchurch

Realestate.co.nz says property listings and asking prices surged in May; Inventories well below average in Auckland and Christchurch

By Bernard Hickey

Listings on Realestate.co.nz surged a seasonally adjusted 16% to 11,544 in May as sellers jumped to try to take advantage of a pickup in activity and prices.

Asking prices rose 4% in seasonally adjusted terms in May to a record high of around NZ$435,887, while the level of inventory nationally rose to 35.7 weeks worth of sales from 33.7 weeks the previous month, although it remains below its long term average of 41 weeks.

Inventory levels in Auckland and Christchurch remained well below their long term averages as supply shortages continued to combine with solid demand and record low interest rates to stir up demand.

Realestate.co.nz CEO Alistair Helm said confident sellers were finally responding to an ongoing shortage of listings in the face of high demand.

“The state of the overall property market, for the past six months at least, has been a growing shortage of supply in spite of on-going high demand. Sellers seem to have finally heard the message, producing this unseasonal lift, and responded with confidence reflected in their price expectation," Helm said.

This demand produced the lowest levels of inventory recorded in Auckland in the past five years - 20.6 weeks for Auckland and 20.8 weeks for Canterbury. 

“Some balancing of the market is clearly occurring, with several provincial regions moving away from being sellers' markets. However, sellers in the main centres are overturning the myth that winter is the wrong time of year to try and sell a house. Market demand is still high and shows no signs of easing over the coming months," Helm said.

 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

46 Comments

Looks like winter is going to be hot.
First home buyers all in, investors back and rich people spending their tax cuts on high end central houses.
 

Know a family that just secured a $50.00/week drop in rent - Wellington area.  If you're a good tenant and coming off a fixed term - just as with the bank if you have a mortgage - it pays to negotiate.

Not in Grey Lynn

I blame our city fathers for the housing squeeze in Auckland .We need to get rid of Len Brown and get a forward thinking leader.
The Beehive has an immigration policy to encourage skilled and wealthy migrants here, and most of these migrants arrive in Auckland , but Auckland Council has  policies , laws , regulation and levies  to restrict supply of land for housing development, and add to the costs of land .
Little wonder Auckland has, relative to income ,  the most expensive houses in the OECD.
Ordinary New Zealanders suffer as a result of this skewed logic and poor planning because they cannot afford these outrageous prices for land for housing  .
It can only get worse ( or better ) depending where you are on the food chain 
What a cock -up.
 

I reckon most of the major cities in the OECD have city limits - and I bet most of them have higher housing density than Auckland.
 
I think the problem is that there are so many 1/4 arce sections near the CBD that should be appartment blocks, but instead are heritage zones, etc. Most of these houses that are selling for 1 or 2 million should actually be 20 appartments each selling for 400k

Fair Comment Jimbo , but my point is what is the City planning dept doing about it ?

Auckland should be kept low density in case a volcano goes bang!
 
Satelite cities should be part of the disaster planning, not more flats in suburbia.

The plate has moved on, the next eruption will probably be around Rangitoto or off the North Shore

Wishful thinking!
 
Lake Pupuke is 200,000 years old.  Mt Wellington is 10,000 years old.  The positions are random and don't show any well defined progression east.
 
Worse still is that the more recent eruptions are the biggest!

Agree with you. It's better to spread Auckland's population away from the city.

So Boatman - would not be easier to change the immigration policy - e.g. allow to settle in some NZ regions for a few years only.....

Or overseas investors and those emmigating to NZ should have to build their first house that they live in/invest in here.  This would help create jobs and keep housing stock numbers up.

Absolutely a good start.
I am told that in Australia overseas owners/immigrants are allowed to invest BUT only in new-build property. Not sure the limits of that policy but it would be a good start.
Also immigrants bringing in money to invest should have to invest in business activity and not in residential rentals using a local manager to overcome the language limitations.
Perhaps we are also one of the publicized "bolt holes" for wealthy Chinese who seem to be displeasing their own Government.

Imagine the character springing up in Kiwi cities if we forced immigrants to construct a house of their own cultural heritage : The Yanks could build log cabins , Yurts for the central asian nomads , Turkish konaks , Dutch gambrels , Russian izbas ,  mudhifs from Iraquis , Queenslanders by  the good immigrants from Brissie , and the ubiquitous bamboo and corrugated iron shacks from the Filippinas ......
 
...... my only reservation is the eskimo ( inuits ) igloos ..... summer could be a problem ...

Yeah, right
The locals can pitch a tent perhaps
We would even let GBH back in. I can offer a used refrigerator carton and a Warehouse 6x8 blue plastic tarp
;o)

 
SK, no one’s spending their own money it’s all borrowed.  That’s why there is so much activity because of the low rates.  Goody not much longer now before we become a Greece or Spain.
 O no hang on we are ok because we still want to pay lots of borrowed money to each other for rubbish houses.

Are we all surprised that house prices are heading up.  A good friend wanted to build a garage, our good helpful friends at Auckland Council sent him an invoice for $6100 and that's just a building permit.  A full resource consent will be easily double that..! 
In comparision, building a 4br house in Brisbane will take 20 weeks from signing the contract with builder to open the front door.. and building permit is less than 18K..  We are sheeps!!!

In adelaide most building and planning permits combined will be no more than $200. Auckland's governance is a joke

When it goes wrong, and it will one day go wrong. It's going to be REALLY messy. It would be nice to upgrade my house to a huge 5 bedroom 3 bathroom 3 garage..., which I could at the current low rates and the bank would like me to. But I'll stay put in my 3 bedroom 1 bathroom single garage. Provides me with room for interests rates to go to 12% (anymore and it's baked beans & sea gull on toast) . How many mortgage holders could take a higher interest rate hit?

Thanks Hugh. I have thought about a larger place with more debt but I prefer the comfort of knowing I have some leg room and can keep a roof over our heads. Bigger would be better, and don't blame people for jumping into larger properties at the current low rates but I don't like the worry and stress of more debt and the uncertainty of future interest rates. But that's just low risk stress free me. The current place is bigger than what I grew up in many years ago and that was perfectly fine.

It's going wrong right now, for some people.

“Some balancing of the market is clearly occurring, with several provincial regions moving away from being sellers' markets."
 
In non real estate speak, does that mean its now becoming a buyers' market?

Hugh, I was just trying to see if any of the real estate bulls would bite.
 
Lets face it, for 95% of NZ, if you haven't sold by now you have likely missed your best opportunity of the last two years.
 
I said of the March blip up in prices - wait three months. We have since then had April figures and they were down. May figures we haven't seen yet but I doubt sale prices (not asking) are going to look that good. Do we need to wait for June numbers?
 
Maybe not. In ten or twelve days we will probably know.   

Yes.

What is the meaning of housing market balance?
 

Oh ! ....... so " housing market balance " has nothing to do with how many houses are 50 / 50 odds of falling into the swamp the next time a 5.0 shake rolls through Christchurch ?

Really?  An article written by people who think nominal returns matter - they don't!
 
When you buy, your mortgage does not increase with inflation!  If you have inflation, your rental yield will increase too, and of course the yield will bear some relationship to inflation (as interest rates will be related to inflation which will determine yields.
(Buy a $100k property with 4% inflation, 7% interest rates and a 7% yield - if prices rose 2% in nominal terms in a year you now have a 7.3% yield on a on the investment and a property worth $102k!  That is not bad, but the doomsayers will tell you that you lost 2%)
 
So... the truth of those figures is that in 25 of 36 countries, prices either rose or fell at a lesser rate than the previous year  -  which isn't exactly indicative of an accelerating decline!
 
And of those 11 who had accelerated declines -  Spain, Portugal, Poland, Greece, Bulgaria and Ireland made up over half.
 
Australia also make the list but they are in a different part of the cycle coming off a cyclical peak

It's called an example... doesn't make any difference if it was $10 or $1m.
 
Anyway in Dunedin you can buy a house at $100k and probably get 9 or 10% yield.

US 10 year in the 1.4s!!!!
 
Terrible US payroll numbers with more downward revisions!  Expect rates low for .... ever???

I agree, Hugh, although I don't see Armageddon anytime soon. Let's keep things in some perspective. Nevertheless we are seeing clear signs of a global slowdown in economic activity affecting China, India, Europe, the USA and Australia. New Zealand will be taken along for the ride whether it likes it or not, and regardless of what the govt. does or doesn't do, or the howls of protest from the magical thinkers on the Left that it’s all the govt’s fault. Previously we have been able to rely on the strength of the Chinese economy to buffer us from the trials of the world’s economic woes, both directly and indirectly through Australia. But not this time. This time China is heading for a sharp slowdown, commodity prices have fallen, resource stocks on the OZ market have tanked as a result and Oz itself is descending into the toilet. The boom times there are well and truly over.
 
There are many interesting issues to consider out of all of this, particularly for investors and businesses, but for me one of those will be what will happen to house prices in Australia should it enter into a recession, and two, what will happen to our house prices as a result? We have had high real estate prices on low volumes for some time now, which is never a good sign for any market as that is often a prelude to a slump in market prices. The only thing operating in our favour from the residential point of view is the extreme shortage on the supply side, the recent sharp reduction in mortgage interest rates, and that as a country we still grow and export a lot of food. And that isn’t going to go out of fashion anytime soon.

Well written argument David B, pretty much todays world in a nut shell.

Key to the $US will be China's long term plans ...... clearly they're not happy with the Federal Reserve's behaviour ... .. and the time will come when China will more freely  utilise other currencies ( the $A , the British pound , the Swiss franc ,  and maybe even the new German deutschmark ... after Germany abandons the Euro ) .......
 
........ in lockstep with the Aussie $ , the $Kiwi will also fly ...... give it 5 to 10 years ...
 
But if your line of sight is only a few months , then the $A & $Kiwi could drift lower ...

I read in the herald yesterday that some banks are not charging break fees due to intense competition.  Is this true? I am in the. USA at present so unable to find much out.

Latest top 20:
*Congrats Grey Lynn has improved to no.19.
1          Herne Bay       $1,815,278
2          St Marys Bay  $1,457,722
3          Parnell             $1,320,056
4          Epsom             $1,137,833
5          Stanley Point   $1,101,944
6          Remuera          $1,075,444
7          Takapuna         $1,071,333
8          Mission Bay    $1,051,556
9          Devonport       $1,014,167
10        Ponsonby        $970,722
11        Mt Eden          $964,389
12        St Heliers        $950,000
13        Freemans Bay $946,111
14        Westmere        $942,889
15        Kohimarama    $939,611
16        Cambells Bay  $936,889
17        Omaha             $888,222
18        Castor Bay      $880,333
19        Grey Lynn       $868,667
20        Glendowie      $862,111

If you want to score the geographic locations (20 points for place number 1, 1 point for place 20) then:
 
Inner West  has positions 1,2,10,13,14 and 19.  67 points
 
North Shore 5,7,9,16 and 18.  50 Points
 
Inner and Central 3,4 and 11.  45 Points
 
Eastern Suburbs 6,8,12,15 and 20.  44 Points
 
So the Eastern Suburbs are actually the bottom of the tables!!  (Even if you move Parnell from Central to Eastern then it's still below the Inner West!
 

Must be a slow day down there. Don't like your result so why don't we look at the average:
1. Inner and Central = 15.00
2. Inner West = 11.16
3. North Shore = 10.00
4. Eastern Suburbs = 8.80
Oops, as an Eastern suburbs house owner I don't like that result either. How about Medians?
1. Eastern Suburbs = 12
2. Inner West = 11.5 [not generous enough to give it 13]
3. North Shore = 9
4. Inner and Central = 4
I know you're just busting Double GZ's chops, so it's all in good fun, but I need to highlight the number of ways to talk our own books. FWIW: Give me a beach suburb any day.
 
 
 
 

Complete oops, I now need to resort to writing long incomprehensible posts, spamming the board on a daily basis, or as a complete departure relay some factual observations.  

Inner West: Herne Bay, St Marys Bay, Ponsonby, Freemans Bay, Westmere, Grey Lynn and Pt Chev
Inner Central (Grammar Zoned): Remuera, Parnell, Epsom and Mt Eden
Inner East: Mission Bay, Orakei, Kohi, St Heliers, Glendowie and St Johns
Inner North: Stanley Pt, Devonport, Takapuna, Milford and Castor Bay

hey Chris_J
Beaconfield street, Grey Lynn is still for sale (one with pool), now with a asking price.  what's wrong with that?

The pool is the entire backyard, no lawn so no good for young families hence no sale.
 
As a comparison a derelict bungalow in Dickens St Grey Lynn (owned by housing NZ) sold on Wednesday at $995,000.

Very good point. 
As comparision, I have just put in an offer for a house in Brisbane.  Roughly 3 km from CBD, 2 large br + study on 450 sq land - house sits right at the front so there are plenty of space in the back for extension + pool (max coverage is 50%).  This Queenslander home has been renovated and almost identical to Ponsonby bugalow - all up early 500K...

mm - 480 sq section so not a full site either.

 
Just looking at those pictures - reminds me of the film 'Trainspotting'
 
A million dollars aint what it used to be!

Floors will come up nice with a sand and 3 coats urethane