Inventories of unsold houses listed on Realestate.co.nz fell to a four year low in June after new listings stalled going into the winter while sales remained stronger than a year ago.
The national inventory of the number of weeks of listings relative to sales fell 17% to 29.8 weeks of sales, which is well below the long term average of 41 weeks.
Auckland's inventory fell to 18.1 weeks in June from 20.6 weeks in May and is below its long term average of 32 weeks. Inventory in Christchurch fell to 16.4 weeks from 20.8 weeks and is below its long term average 32 weeks.
Realestate.co.nz said in its June monthly Property Report on unconditional that the market had firmly moved back to being a 'sellers' market where a shortage of listings and solid demand meant that pricing power was with sellers.
"The ever steepening drop in inventory that has been registering in almost every region for the past six months has now reached a critical point, overwhelmingly leaning the market in favour of sellers across the nation," Realestate.co.nz CEO Alistair Helm said.
“Sales of homes are up 20% year-on-year, but the numbers of new listings just haven’t kept pace, so demand continues to outstrip supply. Each of the key regions – Auckland, Wellington and Canterbury – registered some of their lowest levels of inventory on record in June, simply because buyers have been so active,” Helm said, adding that low interest rates are a factor in the heightened activity.
Inventories had also fallen in Waikato, Hawkes Bay, Wairarapa, West Coast and Queenstown, he said.
“With inventory levels so low, not one region of New Zealand can now be described a buyer’s market, even though buyer demand is what’s driving the market activity,” he said.
New listings fell 16% nationally to 9,689 in June from 11,544 in May. However, the average property asking price fell 3% to NZ$424,315.
“It will be interesting to see how the ongoing demand for property affects asking prices over the remaining winter months. Although it’s been cold, home hunters are still on the trail of hot property and that will no doubt continue to be on sellers’ minds," Helm said.
ASB Economist Christina Leung said the Realestate.co.nz monthly property report showed the the housing market remained very tight, "with supply constraints particularly evident in Auckland and Christchurch."
"The decline in new listings nationwide reverses out the improvement seen in the previous month, suggesting the recovery in housing demand and rising house prices are not encouraging potential sellers to put their house on the market," Leung said.
"We expect house price appreciation to be particularly strong in Auckland and Christchurch, reflecting the relatively tighter housing market in these regions," she said.
However, the Reserve Bank was unlikely to act, she said.
"For now there remains little urgency for the RBNZ to raise interest rates, and we continue to expect the OCR will be left on hold until at least March 2013."