A strong lift in new listings on Realestate.co.nz points to a reasonably buoyant spring/summer for the housing market

And for those that like data to go with their music. (re-post from Friday)

Since Trademe broke at 32,000 listings the other day, as recommended by a fellow commentator we will switch to the realestate.co.nz site for future updates on the burgeoning supply of unsold properties around the Country.

Total NZ has risen from 33,448 (realestate.co.nz figures) on Wednesday to 33,728 this evening (A rise of 0.83% in 2 days). Before Trade broke, there had already been a 5.2% increase in the overhang of stock since 21st August.

Auckland has also seen a rise and now stands at 12,681 unsold homes (There were 2860 sales in August REINZ figures apparently with an average selling time of 42 days - see below) However by my calculations there is already stock in the market for 4.43 months of sales supply (132 days supply ) which would leave me to question the accuracy of the days to sell stats, which won't be near 132 but are likely to be a lot longer than 42.

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2018/Residen...

(Bizarrely, there are quite a number of New Listings with Auctions scheduled for the 17th, 18th, 19th of October)

You'd hope so. They had a 2 month TV marketing campaign. Plus low reserves to avoid last years debacle. So teams actually left with something.

Very insightful. Thanks for such sound analysis of the market.

Yes because of the high profile the Property Industry have a financial interest in the success of the event. There's no way they would have let those crappy terraced boxes go unsold, gotta keep the game going, the figures rigged :) There realistically worth around $600-$700K to a working Kiwi.

The reserves were set well under the median price for a 3 bedroom house in that area, despite them being in the best part of the area, and coming fully furnished.

I'll wager over 14,000 Auckland listing before the middle of November and over 15,000 by Christmas. The level of growth in stock and lack of sales will escalate this rapidly. Plus if asking prices have gone up, vendors are still in dreamworld so sales for September and October are likely to be very sticky.

Stock breeds stock, for a few years now the market has been starved but, as buyers see things not selling and opportunity to trade up for a decreased differential the number of 'would be' traders will continue to climb. Will the first time buyers be able to prop it all up though? Remember if those that are not in the market choose not buy then values for everyone else and perceptions of equity are meaningless - Just ask the Aussies!

You could be right about those central suburbs.
Residents are likely to 'get trapped' by a fall in equity and are not able to leave, even if they wish, as the lenders will have the final say over what price they can escape at. Not all will want to leave, of course, but markets never stand still, no matter what they are, and at some stage, sales will happen, and that will either allow others to move alongside them or further entrench their capture.

Is more than 100 listings in Remuera a reflection of scarcity? I had a look at the number of dwellings on the stats site and it indicated;

There are 1,308 occupied dwellings and 87 unoccupied dwellings in Remuera South.

No idea whether stats 'Remuera South' area aligns to Remuera (as per TradeMe geographic area for the suburb) or not.

But if we consider Wellington Central or Khandallah in comparison both have only 30-odd listings each.

"But listings for good properties (especially houses) in the central suburbs remain scarce - and are destined to stay that way"

Can I borrow your crystal ball ? Mines broken obviously.

People who own or can afford to own in those central suburbs make up a small proportion of the population. They are like an island and are relatively meaningless for the overall market.

That seems a significantly sized movement indeed.

I’d focus on inventory - up 17.7% but still it’s a big increase considering there was a lot on the market last year. I imagine the comparisons to 2015 and 2016 would show higher growth again. The trend is still emerging but if this trend continues the market is going to get very soft. The current prices were built on FOMO, certainly no reason for FOMO now.

Its all the upcoming sellers trying to get a handle on what they should ask for their property when they list it next month.

Fully furnished too yes?

I agree the prices were good considering what was being offered. People forget that we are talking about prices in the order of $1M for terraced 3 bedroom units in West Auckland (albeit new and fully furnished to a very high standard).

The winning property sold for 4.2% above the Hobsonville Point median price for a 3 bedroom home despite being fully furnished, and two sold for well below the median price.

Being a CHCH rental tycoon Man where did you travel, NY, London, Paris...let me guess Brisbane!

...and another, from ChCh; this Saturday.
Son; keen on a particular property - his second step on the proverbial ladder, asking $660k. I suggested offer at $540K, but he was too embarrassed! But I relented and he bid $580k. Counter $639k. Son came back at $600k. Countered at $629k. I asked him to withdraw his offer ( being a financial crutch and all!). "Done @ 600k!" Settles in 4 weeks.

Indeed. Perhaps the dismal Block auction was the RE equivalent of yelling 'Fire' in a crowded theatre. In short, FONGO......

My sentiments exactly.

Good point Doris

Yep. Edge of precipice stuff. Auckland prices will be down 5-10% this time next year

Indeed, its a nice time to be on the sideline

I think you'd only start to see noteworthy downward pressure on prices if there was a sharp increase in interest rates, an external shock affecting key trading partners, and/or a significant rise in NZ employment. Elevated inventory will have some downward pressure, but unless there is a market change that affects home owners'/investors' ability to pay their mortgages, I think things are going to stay flat.

I fit that criteria perfectly and yes, I’m sitting on my hands regarding buying unless what I deem an amazing opportunity pops up.

Head and heart are very different as I really want to own a home again but head says no so I can understand people still buying but I think the scales might be tipped towards waiting.

Who wouldn't want to get out at a peak though?

It seems many in the property market have resorted to the belief that if you say something enough it may come true.

Successful Economic model: "Make more things, at a cheaper price with a better quality level"
Failed model: "Make fewer things, at a higher price with a lower quality level"

Which model have we chosen for our residential property market?

That article has 'Alasdair Campbell' levels of spin attached. Its a thing of beauty (though not grounded in any sense of reality).

"House sellers have reached all-time levels of optimism over the prices they can sell their properties" - all time levels of optimism!! Hahahaha, I love it!!

Asking prices are not the same as selling prices. Asking prices are the thing that stands in the way of a sale, and results in properties being withdrawn from the market while the vendor tries to find a new real estate agent who will tell them more lies, or a tenant.

In a booming market, buyers pay over asking in order to secure the property and agents underquote to attract buyers. In a falling market, vendors accept a discount on asking prices. So asking prices are pretty meaningless in the end. Although in overseas jurisdictions, the discount on asking is a tracked statistic - something someone might want to keep an eye on here.

You'd be lucky to get a quarter acre with a house on it for that in Pegasus, and that's beyond what i'd consider the outskirts of Christchurch.

They’re living in a dream land if they think they can market, sell, and settle in three weeks though.

We need Nic to counter the ppty spruikers - who are already supported full time by msm.

Heavily into property perhaps?

Housing is only a good long term investment ... if people have jobs.

Which is where its about to break down.

Some good points. I recall Bernard Hickey making predictions of 25% drops on this website 10 years ago and boy was he wrong ( and I gave his opinion too much respect and suffered accordingly). Even though it's seemingly irrational, property prices seem to continuously surprise on the up side. Having said that I pick some mild-moderate declines.

TM2

Your comment clearly shows you are a savvy, skilled and experienced property investor and in the minority of participants in the property market. You may even be a property market professional.

Most other property market participants are non professionals in the property market (i.e they do not make the bulk of their income from this). Most owner-occupiers and first home buyers and most novice / part time property investors are price takers and buy at market price - they have had very few historical property transactions. These are people who may not have studied the property market with the level of intensity that you have. These people know very little (if at all) about buying below "true market value". Most of the comments above are being directed at this audience in Auckland rather than savvy property investors like you.