Realestate.co.nz is reporting that December ended with a record low number of homes available for sale on their service - just 18,230 and down by a quarter from December 2018.
The scale of the drought in offerings is sharp, and is a long way from the historic high of just under 60,000 homes listed in April 2008.
In Auckland, the drought is just as severe, with 6,600 listed for sale at the end of December 2019 and also down a quarter in a year. (The historic high was also in April 2008 when 18,260 were on the market.)
It may be a reinforcing situation. "People are often reluctant to sell without having somewhere to go – especially if the rental market in their area is cramped,” said Vanessa Taylor, a spokesperson for realestate.co.nz. “This then has a flow on effect with homes coming off the market before new ones go up for sale.”
Housing available for sale has been on a downward trajectory over the last decade potentially due to New Zealand’s population growth, which between 2008 and 2018 grew from 4,280,300 to 4,882,500. The number of owner-occupied households has risen by +10% to 1,228,500. The number of households rental accommodation has risen by +15% to 675,000.
It is clear that the big long-term move is outside Auckland and comes at a time that all the new-build focus by public policy officials has been on the Queen City.
This is now having an out-sized impact on asking prices with the regions seeing substantial rises over the past year.
Five regions set record high asking prices.
| Region | Record high average asking price December 2019 |
Average asking price December 2018 |
increase |
| Bay of Plenty | $722,106 | $652,363 | +10.7% |
| Nelson & Bays | $763,904 | $638,230 | +19.6% |
| Southland | $374,636 | $309,053 | +21.2% |
| Marlborough | $538,467 | $508,482 | +5.9% |
| Manawatu/Wanganui | $450,673 | $359,364 | +25.4% |
Market analysts are hoping high prices entice homeowners to list in January and February.
The levels of inventory for sale in Gisborne (5 weeks of current sales), Hawkes Bay (7 weeks), Wellington (6 weeks) and Manawatu/Whanganui (9 weeks) are particulatory low.
Housing inventory
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96 Comments
Absolutely correct Drought in New listing.
Also most houses that are comming to market are million dollar plus houses so FHB should invest their deposit instead of holding and waiting to enter property market in Auckland as definitely most houses for sale are not for FHB.
Seeing the economy situation...IS IT CALM BEFORE THE STORM.....and could be in either direction......either house price shoot up again (In Auckland from average million dollar to 2 million dollar but how many FHB can afford on average Kiwi wages though still possible in ponzi scheme) ....OR.....fall....which too seems unlikely at the moment in absence of any catalyst (Definitely not interest rates as will be down for decades to come).
Interesting time ahead.
Yeah Stuart786. This may be make or break moment for FHB though house prices have been streched to a level that is at breaking point for FHB specially in Auckland. Unless FHB pay a premium for pigeon hole in Auckland - No choice.
Still want to vote for Labour who flipped on CGT, may be one of the trigger for sudden demand....more demand. Birds of a feather flock together and power corrupts.
Houses won't rise significantly above inflation from here. Growth is stalling. Interest rates have bottomed out. Seems unlikely that house prices can do anything but plateau/edge upwards because there is just no capacity for FHB's to pay more (they were exceeding their ability to pay in hope of capital gains that are no longer occurring) and boomers are slowly starting to spend or distribute away their unprecedented generational wealth - they started retiring 9 years back and will stop propping up the top of the market over next decade or so.
Hi Foyle, Understand your logic but than who is buying houses at premium - houses that were taking time to sell are now being grabbed at 10% to 20% premium.
No FB and No FHB than who is paying premium to already inflated house price in last 2 months. If even speculators are out of the market than who ?
The type of money that is being thrown is possible only in case of money laundering and f overseas money is involved to park in tax free safe heaven like NZ..
Agree, its the calm before the storm, and which way from here? Up. Not what we want to hear, for our children as they try and get on the property ladder, but think about it, how many NZers live in Australia? How many of them are thinking about returning home, more than quite a few, where are they going to live, where else in the world can they go, we are it.
Agree that it is bad for future FHB home buyer but is reality and politicans of all breed and kind realizes that to have Rock Star economy it is must to run the housing Ponzi.
Economy cycle will play and it cannot be avoided only delay by free free and cheap money. More the delay Bigger the bubble.
CoreLogic’s last update on our home (Inner City Bays Auckland) was 99.1% of RV as of 5/1/20. Still relatively stable.
Re the market direction from here, who knows, but I wonder how many are like me with maturing TDs in Q1 2020 where the rates of 3.25% to 3.55% are now going to be 2.7% and am wondering whether it’s better off in something tangible. Maybe a local rental.
Not so much a property ladder as a millstone. No hope of significant capital gains beyond inflation or investing money in sharemarket, so why get involved? Better to place your money somewhere that might have a decent return - and stay out of Auckland and Wellington if at all possible.
Kiwis came home under National, nowadays they are all leaving the country again. Its only because so many Kiwis are leaving again that the net immigration figures seem normal. If you look past Kiwi's coming and going, 2019 was a record for the number of foreign immigrants coming to NZ. So much for Labour's election promise to reduce immigration. Or maybe that's what they meant to do - drive Kiwi's out of their own country, so they can replace them with cheap (often illegal) labour from the third world. #letsdothis
Its our version of the Aussie bush inferno more like it. FHBs are history in the maincentres. The business model favours boomers with two or more freehold homes and that won't change because they hold the nexus of voting power. What will change is our population. NZ born FHBs will exit NZ entirely and go to Aus, Europe, UK. They will be replaced by the likes of Fijian Indian immigrants who are happy to live in higher density headcounts per house and possibly share its ownership among them, or simply pay rent to sleep in the corner of a closet. Well done NZ!
Good luck with that wish!
Any hope I had of meaningful policy change across a range of policy areas evaporated months ago. It's just tiring and a waste of energy to advocate for change.
Labour have some good ideas but no execution, National are full of bad ideas and execute well.
My new mantra - be thankful for what you've got and enjoy life!
Congratulations, I wish I had written it first: ""Labour have some good ideas but no execution, National are full of bad ideas and execute well.""
Is there any hope that a NZ political party will propose a 'Steady State' - a simple population plan setting our existing immigration quotas to match the numbers actually emigrating?
Climate refugees could be from anywhere (obviously Jakarta and Bangladesh but ref recent news even Zambia) and IMHO we should do what we would do if it was a disaster hitting local homes - look after our neighbours first. NZ has had enough dealings as a colonial power or agent thereof to have special responsibility for Pacific Islanders. Plan and prepare infrastructure now so PI communities can be moved when needed (could be a couple of years or a century away but plan now) - houses can be built as they arrive but the main roads, sewers and access to utilities can be prepared in advance.
First question for any pospective candidate - what is your population plan for NZ?
Steady state is the antithesis of neoliberalism it could be argued, ergo it will never be allowed to happen. Chaos and unpredictibility are the conditions in which lawless corporations do their best when extracting wealth from nation states. Look at leaky home...if you think that was an accident, think again. It was designed to fail. Likewise immigration, it clearly isn't working but the money it generates is fantastic, especially if you're a bank or a property developer.
Recently a daughter got a shock to find her house valuation had dropped 20% or so. Turns out the neighbors who had listed their property at $600k had actually sold for $380k having a rather large effect on the computer maths. Asking price is not an indicator of much.
Umm that's quite a drop in prices but it could be far worse. I recently spotted this eye watering -84% price reduction in a central Auckland, 1502/30 Beach Road, City Centre, 3 bed 2 bath apartment and looks in good condition (At least from what we can see in the real estate photos). It recently sold in December for just $163,000 though its RV in July 2017 is $1,020,000. Guess it will also impact prices in the neighboring apartments.
Thing is highly overpriced property will need to sell at some stage at a more affordable rate.
What? Prices can't go down. The real estate agents keep telling us this.
"There's almost zero risk. If you take a step back from any graph, it really is a guaranteed investment buying in central Auckland suburbs.."
link - https://www.stuff.co.nz/business/property/118569686/house-prices-will-c…
Indeed. In USA Real house prices dropped from 1890s for 50 years into mid 1940's, and didn't get back to 1890's values till 1990's! Australia had similar price drop through to 1940's Prices can go down significantly over long term, just sadly not in the memory of current generations.
The seller didnt take as big a haircut on it as the previous owner before them, who purchased it for $830k and sold it for $367k. Moral of the story, is don't buy leasehold apartments.
https://www.interest.co.nz/property/98866/successive-buyers-have-lost-m…
Lowering the OCR ,and subsequent lower mortgage rates appears to support lower rather than higher volume of house sales. Using RBNZ M10 data and Stats NZ aggregate dwelling data, 2019 will see housing turnover as a (percentage of stock) fall to levels seen lower only in the 2008 and 2010 years. 2020 housing turnover will fall further.
Brock L. Suggest have a sqizz at Robert Putnams work on the diversity dividend. He concluded that increased diversity through migration reduced social capital and caused the population to become less interested in contributing to their communities. Putnam calls it 'turtling' - the withdrawing into ethnic based conclave mentality.
NorthM46. It's part of the problem, agreed. One of the reasons I personally don't own rental properties. We have aspiring FHB kids so understand the anger. But with 50K+ new people being allowed to pour in every year, old farts buying up rentals are only part players in this drama. But they are easy scapegoats because the identity politics movement suppresses open discussion on the role of migration.
Not at all. Plenty of discussion about immigration in many places, online and in the real world, and they are a linked problem. With the foreign buyers ban new immigrants need to rent until they gain residency, and who is there renting the houses out to them.. The Johns and Karens.
Their terrible policies deserve to be criticised, despite the fact that they won’t get any parliamentary representation. This website and its commenters love giving TOP oxygen, and it’s only fair that I push back with the truth. Their policies wouldn’t help you - for a start rents would skyrocket. The idea that something can be made cheaper simply by taxing it is folly.
YoungD&B. Yes, it's disturbing to see the way 'racist' alarms immediately start sounding and many people begin shifting uncomfortably when you raise immigration, for fear of being branded a red necked reactionary. That NZ has one of the highest migration rates in the developed world and the obvious heavily distorting effects on our society, economy and infrastructure being apparent every day, is a subject that receives carefully nuanced reactions. Accommodative 'solutions' is the usual response; how we can build more houses, roads, shoot baby boomer landlords etc, rather than a facing of the basic issue that the flow of low quality permanent migration must be turned significantly down if our culture of home ownership for young people and decent working infrastructure is to be maintained.
How the hell can one not be politically apathetic about it, if the party I voted for promised to cut down on immigration, yet didn't do anything once elected. And the other "option" is National... I don't even need to say anything about their stance on immigration.
I'm politically apathetic because no matter who gets into government, we are fucked.
Happy realization that all political parties are same.
National policies are for Rich and to create divide between Rich and Poor. Labour policies in principal to hel poor but they do not impliment except may be raising the dole here and their (Which too is bad).
Like :
National did not went to election with promise of CGT but Labour did went to election with CGT and what did they do, once in power, played vote bank politics and dropped one of their main promise that they went asking vote (If FBB would nothave been introduce just after winning, Labour now would have backed out of it, if were given a choice now) - This is Labour party.
National is in favour of increasing the immigration number while Labour and New Zealand First both wanted to drop the number, infact our very own WP wanted to reduce it sharply but once in power....................less said the better..............
So bith the main political parties do the same thing only one does it as per their election manifesto and the other does U turn when in power. SO may be need change in status quo of political parties in NZ...maybe opportunity party if playtheir card well may enter parliment in next election...:)
Totally understandable, and I'm becoming the same. However that's kind of dangerous.
Someone once said that we get the politicians that we deserve. If many of us get apathetic, then there's no chance we'll get anything different.
I feel we'll be in a different place as a country in 6-7 years. By then, home ownership would have plummeted even lower, and proportionately non-home owners will have more power as voters.
So, interesting question as to 'why'.
Housing is not really an existential question like nuclear annihilation or climate change.
Apart from these times of the year when it's crazy, it's not too dire to find a rental property throughout the year.
Also, lots of young people in their early - mid 20's don't think that much about housing. For many, buying a house is a question quite a few years away.
If the rental situation in January becomes common throughout the year, then I think there's a much higher chance we'll see protests. But for now, it's a big inconvenience for some for a small time of the year.
Open borders and free movement of people on a global scale are key tenets of the liberal Millenials value system. They are (literally) prepared to sacrifice themselves (out of guilt for their white priviledge) rather than abrogate the rights of third world citizens to live wherever they choose.
Easier to find a job than a flat in Wellington;
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12298132…
So basically it's wage earner affordability that's blocking the system. "People are often reluctant to sell without having somewhere to go". So it appears that we're stuck in the overpriced property loop, that was pushed up by foreign buyers. Aka the property ponzi scheme.
So why not reduce our very high immigration that is currently suppressing wage growth with too much cheap competition for jobs.
And option 2) Generate much needed capital for new homes is to tax "Empty Homes" in our inner city areas, such as Auckland which has officially 39,393 vacant homes. There are already successfully proven models for this scheme around the world from Paris to Vancouver.
The Vancouver levy raised $39.4 million (CAD) in it's 2018 tax year with a 1% tax on vacant homes, collected from the owners of 1,989 vacant properties. We have 19 times more empty homes in Auckland than Vancouver has, imagine how much could be raised for NZ on Auckland's vacant homes that could be used for affordable Kiwi build. Especially considering that you're mostly taxing Overseas Investors so they can keep their bolt hole in NZ and more importantly they can not vote, a Win Win for Kiwi citizens.
Global news article: Vancouver empty homes tax nets another $39M as number of vacant properties drop, city says
https://globalnews.ca/news/6197311/vancouver-empty-homes-tax-revenue-20…
$1.5Million - FHB can not afford and Investors knows that rent will not justify to invest and many speculators who were interested earlier will have doubts about CG so not interested. Result : Unsold Inventory.
So many town houses are comming up in Auckland with asking of million plus and than drop to $800s as first time builders unable to hold and this situation is now when the process has just started - what will happen when tens of these tiny townhouses pop up everywhere specially by First time developers with no deep pockets to hold.
Let us not forget that if Economy was in such good shape why is US Fed pumping free moeny every alterante month. Low or negative interest rate are themselves indicator of the economy and time to come (No doubts with easy and literally free money asset class and stock have skyrocketed but for how long). Sooner or later eceony cycle has to catch up unless reserve bank starts to give loan and interest to borrower for taking the loan and obliging :)
Nzdan, you need to know what you are talking about before commenting about the ChCh market.
Property is very affordable for those that want to own rather than renting.
The reality is that ChCh property offers both owner occupiers and tenants quality affordable living.
We are still able to buy property under true value but it won’t last as ChCh is going to be the city of choice and I am getting this from many people that are coming down from Auckland!
They are saying that Auckland is now a shxthole and they should’ve moved down far earlier.
One of my sons was in Auckland for New Year and also said that he wouldn’t live there as not too many positives, but then Aucklanders do tend to have blinkers on!
One of my relatives just had the same experience in Christchurch. Not many positives there. She came home wondering what will be the date when the last person to leave will turn the switch off. The huge population in Auckland versus the diminishing small population in Christchurch says it all. People prefer a warm vibrant city full of opportunities and experiences.
As always you shoot yourself in the foot. Auckland was always far bigger than poor old Christchurch. Even before the large increase in immigration of late. Please tell us why the immigrants bypass Christchurch. We all know why. You and your son have blinkers on. Auckland has so much going for it opportunity wise and immigrants know that. I love visiting Auckland. The traffic is what you would expect in a large, successful and vibrant bustling city. I visited New York in July last. It is even busier than Auckland but still simply amazing.
I have had two Christchurch RE searches set up for over 2 years now. One is running at almost half the number of usual listings for this time of year, the other is at two thirds the number. Definitely a massive drop in listings for the established parts of Christchurch.
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