Shortage of sale listings prompts vendors to seek record high prices for houses according to latest figures through Realestate.co.nz

Shortage of sale listings prompts vendors to seek record high prices for houses according to latest figures through Realestate.co.nz

The average asking price of vendors for properties around New Zealand reached a new all time high in April on the back of an increasing shortage of houses available for sale.

According to data released today in the New Zealand Property Report – a monthly report of housing marked activity compiled by Realestate.co.nz – the national average asking price extended to NZ$447,275 (seasonally adjusted truncated mean). The previous high, set in November last year was NZ$446, 277.

These asking prices compare with an actual median price of NZ$400,000 on sales in March as recorded by the Real Estate Institute.

The new high in asking price has been prompted by a shortage of available houses on the market.

Inventory – the number of equivalent weeks of sales left on the market – fell to 26.8 weeks nationally, a small decrease on March, but close to the all-time low of 26.2 weeks.

New lows in inventory were set in Canterbury and Central North Island, while Auckland fell to 14 weeks, just above it’s record low of 13.9 set as recently as December 2012 and well below the long term average of 30 weeks.

The fall to near-record lows in housing inventory in Auckland came despite a strong lift in listings in the area during April compared with the same month a year ago.

There were 3453 new listings in the Auckland region during April, which was up 9% on the total in the same month in 2012. But despite that the number of weeks worth of inventory dropped to 14 weeks from 14.2 weeks in March.

The shortage of supply in Auckland has become a national issue due to its impact on national house prices. Reserve Bank deputy Governor Grant Spencer recently warned about the possible impact of house price rises and conceded that the Auckland issues were complex. Prime Minister John Key said last month the government was now doing all it can to help the RBNZ avoid having to put up the Official Cash Rate in response to Auckland house price inflation.

It has been estimated that Auckland has a current shortage of new houses of about 30,000 and needs to be building around 13,000 a year.

In fact, according to Statistics New Zealand figures, there were just 4582 new houses built in Auckland last year. And latest monthly house building consent figures suggest that there is no discernible increase in new housing activity in the country's largest city.

Housing Minister Nick Smith has lobbed a few grenades in the way of the Auckland Council, saying it should "smash" the metropolitan limit, while also releasing a report that says the council has only about 2000 sections ready to build on and not the 15,000 previously claimed. The council for its part in releasing its draft unitary plan has said Aucklanders want planned and progressive development, not a smashing of the city's metropolitan urban limit as sought by the central government, to meet the SuperCity's housing and population growth demands.

Marketing manager for realestate.co.nz Paul McKenzie says that the new high in vendor asking prices is part of a continuing growth pattern. “While the asking price did reach a new high, a six per cent increase on the same time last year, it is only a half of a per cent increase on last month. Asking prices are trending upwards and look set to remain high through the winter months.”

The new high was caused largely by new all-time high asking prices in Auckland and Central Lakes/Otago. While Auckland’s average asking price of NZ$612,167 was a small increase on the previous high of NZ$611,864, the new high in Central Lakes/Otago, NZ$679,987 was up nearly NZ$40,000 on the previous high of NZ$642,251.

McKenzie says the low inventory figure was caused by a strong month of sales, “what is indicative is that despite numbers of new listings similar to prior year, inventory is down 20% on the same time. For example, Auckland had 3,543 new properties brought to the market in April, 9.3% more than a year ago, yet inventory fell 35%.”

Despite the increase in properties in Auckland, 10 of the 19 regions in New Zealand reported listings down on April 2012. “We are still seeing a reluctance to bring new properties to the market, this is creating an ever tightening market as demand is staying high, there simply aren’t enough new properties on the market to slow things down,” says McKenzie.

Realestate.co.nz is the country’s most comprehensive property listing website, profiling listings of licensed real estate agents with more than 110,000 listings covering residential, commercial, business as well as farms for sale.

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?

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37 Comments

Q: what is a seasonally adjusted truncated mean
 

Henry
this is just another way of calculating the seasonally adjusted average but you discard a certain number of points (or a percentage of points from sample) at both the high and low end
Typically you discard an equal amount of both high and low
This method effectively removes outliers from the sample set
Hope this helps
Craig
 

thank you.

So it depends on who is executing the trimming as to how much one can rely on the veracity of the outcomes? Here is a balanced example of REINZ data as of March 2013 - courtesy of Colin Riden.

Well then, please explain why bank lending to housing is so restrained other than the fact  nominal ann.GDP growth of 2.33% can hardly support more.

“That which can be asserted without evidence, can be dismissed without evidence.” – Christopher Hitchens. Do you agree?

We have anomalies in our data that does not make sense which means the data needs to be re-examined and the dirty components stripped out.
 
Please direct me to a source.

I deal with real people with real money.
 
I never realised there were alternatives.

No worries...the RBNZ is watching...and taking instruction...from the banks...that create the credit..to blow their bubble...that sucker Kiwis are chasing...feel safe do we?

...what could possibly go wrong Wolly?

Oh nothing too serious mandalay...just the popping of the bubble...the theft of deposits by the govt to prop up a bank...a run on deposits at all other banks...nothing serious.....a rapid rise in banking debts gone bad...huge numbers of Kiwi told to vacate the homes they thought they owned...a fat drop in property values to match those round the rest of the world...nothing serious.
But then this is a property bubble economy with bits tacked on as Bernard said some time ago.
It is a situation that will not change until trouble arrives because the banks are making fat profits on the game and the govt is taxing those profits...and the govt is more than happy to run the risk of the trouble...So the RBNZ is under orders not to rock the boat...orders from the banking empire and from the govt.
In reality, much of the govt revenue comes from the created credit flow being taxed sooner or later.
 

This cannot go on forever . John Key risks losing the next election if he continues sit on his hands and do nothing.

And what exactly can John Key do about house prices?
 
Hang on for the ride I say!

@ Zoltuger , there is lots that can be done
1) Remove the legal barriers to making sections availabe ( Resoirce managment Act )
2) Remove the incentives to Land Speculate
3) Offer Incentives to sub-divide existing properties
4) SLOW DOWN THE RATE OF IMMIGRATION
5) Introduce a 5% or 10% cash deposit for homebuyers ( Many countries have done theis in the past Hong Kong , Singapore , Canada, and South Africa )

Most voters are home owners so are quite happy they're homes and investments are going up in value. 

@ Happy 123 , I would suggest that just as many voters ( if not more)  are people who want to buy a home or their first home or have children who want to buy a home 

"We've only just begun,
to live White lace and promises.
A kiss for luck and we're on our way"

When Labour and the Greens get in next year they will be implementing a capital gains tax regime so this will be all fixed up in due course. As much as I like John Key his credibility is going backwards as he is as loose as a goose sometimes. With no strong right wing allies to help get him over the line you would have to give the left a strong chance to get back in power next year. Sell before then as politicians always keep their word so CGT is a certainty.

Because nothing decreases prices like a tax?
Especially a tax that excludes 75% of houses which are owner-occupied?

Haha, good one.  Labour sat in power in the naughties through the biggest property boom in NZ history, you really think they'll make a difference. 
 
Britain (and other countries) have had a CGT for decades, it didn't stop thier property markets booming.  CGT is just another tax, a withdrawl from the economy. 

Sorry to inform you that CGT is red herring in terms of price.
Countries that have CGT/Stamp duty - had higher rates of price inflation than NZ over the last period.
 

The basic flow for calculating 'weeks of inventory' is ...
+ Inventory at beginning of month
+ new listings added
- sales made
- listings that dropped out unsold
= Inventory at the end of the month
With this data you can relate the level of listings to the level of sales to derive the number of weeks of inventory that the sales rate represents.
'Days to sell' is something different. I believe that when you see that information you should read it as 'the number of days the selling agent took from listing until it sold'. It will never account for previous listings that expired unsold, nor does it account for properties still being listed but not yet sold. It is only a rough guide. Of more interest is the trend of that metric.

SK I am not advocating the introduction of CGT. The left will implement it no matter what as they like the idea of it, they said they would implement it and their constituents like the idea of it. Politicians world wide are renown for implementing legislation that does not work such as dropping the age to buy alcohol., the high drink driving levels we get away with in NZ, student loans being interest free and alike. Some stupid laws but they still vote them in.
 
Politicians are generally failures in their profession or whatever or have no qualifications at all so need to be politicians to get a reasonable income. It is no wonder they vote in dumb legislation.

In that case I'm surprised your not a JK fan; he's hugely personally successful.  What's his self-made net worth... 50m ish.  And came from a lower middle class background.

He came from gold plated social welfare.
The kind he is systematically stripping away.
Now its sH1t encrusted.

Bollcoks , JK is not stripping away the welfare state , its alive and well and shaking- down  those of us who spend the money we have earned,  unlike those on welfare spending  money that someone else has earned 

[comment deleted because it neither added to insightful debate, or was abusive. Ed]

Many of them certainly do have more than a whiff of used-car-salesmen about them.
 

A question was asked what John Key can do about house prices - what about restricting the purchase of non new homes to non immigrants. This will force them to be involved in the constrcuction of new homes. Alexander has said his study shows immigrants are not an overriding force - he hasnn't been to the North Shore recently then. I understand the Aussies do this already but by the time NZ wakes up the immigrants will be so well established that they will have the political vote power to stop it in its tracks. We need to wake up now. The idea of immigrant elderly parents coming over and after 10 years getting super is abhorent also. Again if it is not stopped now the voting bloc that is being created in AKL will soon make it impossible. Again aussies say it well with their bumber stickers - "F$%& Off - we are full"
 

Immigration is at historically low levels.  The problem is a lack of affordable houses being built, if you flood the market with cheap property options (you'll note I deliberately avoided using the word house) then average prices will come down.  Nothing is going to stop the traditional 1/4 acre in Auckland going up because the supply cannot be increased but affordable flats, apartments and terraces will give first home buyers a affordable option.
 
Then all that has to change is expectations. 

Smalltown - the sad reality is that there are several relatively easy things that could be done to address the housing problem, if there was the will:
1. Ban non residents buying non-new housing ala Aus
2. Open up large areas of land around Auckland ala Sydney
3. Increase state housing building
 

1. yes
2. yes
3. yes
few years ago, I had a stint working for the old Manukau and Waitakere councils - both had massive land bank, now under Auckland Council umbrella.  I don't understand why they are not releasing them for new houses.  Most are within existing residentail built up so it wouldn't be an issue of sprawl.  ACC should shoulder 50% of the blame.

then when children have their degrees  they skip off overseas to earn the big bucks and they leave the kids with the grandparents for the taxpayer to support.

yawn
Both the last Labour govt and this current mob have harped on about addressing housing affordability but have done jack. They are all talk and don't give an ass. Nothing is going to be done, prices will keep rising which will cause much pain (either through a subsequent bust or if the bust doesn't happen pricing young kiwis out for life)
Unlike Australia (eg. Sydney which is releasing huge areas of new housing lands) NZ is all talk and no action
sad but true
some may be gaining in the short term, but the long term??????...................
 

Common taters talk as though a change of faces around parliament, or the Awkland Council table, will change things.
 
Bzzt.
 
Wrong.
 
It's the Staff (who, yer may have noticed cannae be Voted Out) and their predilections.
 
If'n yer a Plan-nerator or a Zone-erizer, then you're hardly gonna admit that the whole notion of spatial planning is a crock, that everything could be nicely managed by a re-thought, truly effects-oriented RMA, and that you have essentially piddled away your entire career putting pointless obstacles in front of earnest citoyen at an individual level, and foobarring entire housing markets at the general level.
 
No.
 
Staff will simply deliver more of the same, and at a higher volume.  Because staff (and their ridiculous Plans) Rule.
 
Sorry, folks, but that's all she wrote.

listen to the chatter
NSW to increase land taxes by $300 pa, VIC $350 pa
 
At present, three-quarters of the annual $950 million cost of funding Fire and Rescue Services is paid for by a levy on insurance companies, passed on to customers via higher premiums for home insurance
 
Currently 36 per cent of NSW properties that do not have home contents insurance would be forced to share the funding load for the first time, as the system moves from an insurance to a property-based levy.
 
http://www.smh.com.au/nsw/households-to-pay-300-for-fire-levy-20130502-2ivzc.html

Yep - firefighters pensions are not cheap and I guess remain largely unfunded - nothing like legal enforcement to jolly things along. It's coming to all of us and not just for firemen - all the servants of the entitled will wish and get the same.