Inventory of houses for sale in Auckland drops to fresh low as tightening in housing market spreads outside Auckland and Christchurch 'hotspots'

The housing market remains a sellers' market across most of New Zealand with inventory levels falling to another low in Auckland, with just 9,567, or 17.5 equivalent weeks of sales, on the block, Realestate.co.nz says.

ASB economist Jane Turner says the data from the real estate industry suggests the tightening in the housing market is now broadening outside the "hotspots" of Auckland and Canterbury to other parts of the country.

In its latest monthly NZ Property Report, Realestate.co.nz says the level of new listings coming onto the market nationally in September increased 7.6% from August with 11,514 listings in the month, versus 10,365 in August, but is just 0.3% up on September last year. And on a 12 month moving average basis there have been 130,915 new listings since October 2011, versus 125,102 in the previous 12 months, a 4.7% increase.

At 44,063, the number of houses on the block nationwide at the end of September was down 228 from 44,291 at the end of August on a seasonally adjusted basis. Measured in terms of equivalent weeks of sales inventory fell last month to 30.5 weeks from 30.9 weeks in August. This compares with a long-term average of 40 weeks and is down 21% from September 2011.

"Auckland showed another new record low number of unsold houses in September with levels falling to 9,567 or just 17.5 equivalent weeks of sales (down from 18 weeks in August) and versus its long-term average of 32 weeks," Realestate.co.nz says.

Auckland inventory levels, on an equivalent weeks of sale basis, are at their lowest level since 14.6 weeks in February 2007. At 9,567, the number of houses on the block, on a seasonally adjusted basis, is at its lowest level since the Realestate.co.nz data was launched in January 2007. The 9,094 Auckland houses listed on an unadjusted basis is also a low.

The Realestate.co.nz says the market remains a "firm sellers market" across 15 of New Zealand’s 19 regions.

Wellington, Canterbury prices up, Auckland down slightly

The seasonally adjusted national truncated mean asking price fell 0.3% in September to NZ$429,312 from NZ$430,443 in August, although this is up 0.9% from September 2011. Both Wellington and Canterbury saw increases in September, with Wellington's mean price up 3% to NZ$447,388, Canterbury's up 1.8% to NZ$381,345. However, Auckland's was down 1.8% from August's record high of NZ$585,482 to NZ$574,798.

"In total 10 regions reported asking price increases, and 4 regions saw rises greater than 5%. The most significant rises were seen in the Coromandel, Central North Island, Taranaki, West Coast and Nelson regions, with Nelson showing the largest increases, up 10% to $455,705. Of the 9 regions witnessing asking price falls on a seasonally adjusted basis there was just 1 reporting a fall greater than 5% with Manawatu/Wanganui seeing a fall of 7.4%," Realestate.co.nz says.

ASB economist Jane Turner said the decline in total housing listings was still being driven by Auckland and Christchurch as demand continued to outstrip supply. However, she said similar trends were being seen in other regions of the country, suggesting the tightening in the housing market is now broadening outside the "hotspots" of Auckland and Canterbury.   

"New listings (seasonally adjusted) fell in September.  Listings in Auckland declined, after showing signs of lifting in recent months in response to stronger demand. This suggests new construction is yet to deliver a meaningful increase in housing supply. However, recent building consents figures do point to a gradual increase in building activity (in both Canterbury and the rest of the country)," Turner said.

"As new housing construction picks up over the coming year, particularly in Canterbury, and increases supply we are likely to see the pace of house price increases slow.  While consent issuance is picking up, the lift remains modest. With the Reserve Bank set to leave the Official Cash Rate on hold until at least June 2013, low interest rates will continue to provide support to New Zealand’s housing market," added Turner.

Realestate.co.nz is jointly owned by real estate national body the Real Estate Institute of New Zealand Ltd and Property Page (NZ) Ltd, which is owned by real estate agents Ray White, LJ Hooker, Barfoot & Thompson, Harcourts and Bayley Corporation.

(Update adds further detail).