This content was supplied by realestate.co.nz
The latest data from realestate.co.nz suggests that national housing stock (the total number of homes available for Kiwis to purchase across the country) has gone up by nearly 30% since December 2020—an increase of about 4,000 properties.
Vanessa Williams, spokesperson for realestate.co.nz suggests that this data confirms an earlier theory—that the market is becoming more palatable for property seekers. “Buyers across the country have more choice coming into 2022. This could mean less FOMO (fear of missing out) and perhaps even more properties hitting the market,” said Vanessa. “If sellers are confident that they’ll be able to purchase after they sell, we could see this number continue to climb.”
Four regions saw their housing stock more than double year-on-year—Wellington (up 206.6%), Manawatu/Whanganui (up 133.7%), Wairarapa (up 111.8%) and Hawke’s Bay (up 107.4%). Other regions, including Otago (up 54.4%), the Bay of Plenty (up 45.3%), Waikato (up 45.2%) and Southland (up 32.5%) saw notable stock increases.
“It’s heartening to see more housing availability coming into 2022. It looks like there’s an exciting summer ahead for buyers and sellers alike.”
Nine regions hit record-high average asking prices
The national average asking price hit a 14-year record high in December; up 23.4% to $985,245 when compared to December 2020. Nine regions led—Hawke’s Bay (up 36.9% to $865,209), Wairarapa (up 30.1% to $827,766), Bay of Plenty (up 29.1% to $999,978), Central North Island (up 28.8% to $825,617), Canterbury (up 27.6% to $674,222) Manawatu/Whanganui (up 27.2% to $671,958), Otago (up 20.0% to $652,839), Taranaki (up 19.6% to $617,466) and Central Otago / Lakes District (up 19.1% to $1,398,407) all hit 14-year record high average asking prices year-on-year.
“Typically, more stock would result in cooling prices because buyers have more choice, but we haven’t seen that happen yet,” said Vanessa. “If stock continues its upward trend into 2022, it’ll be fascinating to watch the impact on asking prices.”
Central Otago / Lakes District, now nearing a $1.4 million average asking price, holds a firm grip on its reign as the most expensive region to purchase a property in the country. Auckland (up 18.5% to $1,225,265) and the Coromandel (up 25.2% to $1,110,512) follow in second and third place respectively.
Green shoots of new listings spring up across the country
Although December is often a quiet month, when compared to 2020, new listings on realestate.co.nz saw a 5.6% increase. “December is usually a “short” month for the property market—Kiwis are winding down for the holidays, so we usually only see activity to the middle of the month,” said Vanessa. “But with significant restrictions still in place in December, it was heartening to see vendors active right up until the festive break.”
In fact, several regions saw new listings increase year-on-year. Most notably, Wairarapa (up 25.7%), Manawatu/Whanganui (up 22.8%), Hawke’s Bay (up 18.6%) and Southland (up 18.2%), while others, including Gisborne (down -34.9%), the West Coast (down -18.6%) and the Coromandel (down -18.4%) saw new listings decrease year-on-year.
“New listings in each region were very mixed last month—some regions saw significant increases year-on-year, while others seemed to quiet down for the holidays—resulting in a moderate increase in new listings nationally,” said Vanessa.
How to spot a buyer’s market
New Zealand has been in a bona fide seller’s market for about a decade, and the country is a good distance away from anything that looks like a buyer’s market. But there have been several recent reports from experts that predict a range of outcomes for the housing market, including a dip in prices and even a “correction” that would result in a buyer’s market.
But how do we spot a buyer’s market? realestate.co.nz measures this regularly through our inventory of listings to monitor market sentiment.
“We use sales data from the Real Estate Institute of New Zealand and our own stock data to find the inventory clearance rate and compare it to our long-term average.”
“This gives us a good indication of how each region is tracking—for example, Wellington’s current inventory clearance rate is nine weeks, but the long-term average is 15 weeks. Because December’s clearance rate is lower than the long-term average, this indicates a seller’s market,” says Vanessa.
“This measurement is a reliable indication of market sentiment.”
Housing inventory
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93 Comments
https://lmgtfy.app/?q=%22quantum+year%22
Nobody knows what a "quantum year" actually means because it's just spastic estate agent gibberish.
In the quantum world, things can appear and disappear in the blink of an eye. Perhaps this is what TTP is predicting for the windfall gains seen in the housing market last year?
Or perhaps a version of Heisenberg's uncertainty principle? If we focus too much on current values, we lose sight of the direction they are heading.
Auckland down 3.6% to $1'225'000
Wellington down 2.5% to $983'000
Full report here: https://www.realestate.co.nz/blog/news/more-choice-buyers-2022-nearly-3…
Its amazing how quickly Trademe has turned from Auctions to listed prices. The number of listings is marching forth rapidly, every time I refresh the numbers jump up. If you are having difficulty paying that epic mortgage off, or if your genius investment property is making you look like a bit of a fool then there are plenty more just like you. Don't let them beat you to the market, because the NZ housing market has become a game of musical chairs. Don't be left holding that million dollar lemon.
Be Quick.
Depends what area you look. Coming to a town near you, Sooner than you think!
https://www.trademe.co.nz/a/property/residential/sale/nelson-tasman/sea…
Can't remember who shared this website https://propertyprice.co.nz/ but it's certaintly interesting. Some eye watering asking prices in Auckland, clearly Agents/Vendors still have high expectations through Trade me...
Those 3 month old Wellington CV's are already looking ridiculous. All those extra rates being paid for nothing. Councils loving it.
Homes estimate $1.28 million
Sept 2021 CV $1.17 million
For sale $859 thousand (and it is a site allowing townhouses)
https://homes.co.nz/address/wellington/island-bay/6-carlisle-street/DLb…
It looks to me like that is a home that has significant issues - the third option given under build or develop on the ad is "Restoring the current home (full builders report available)." Both the suggestion and the fact that the vendor is providing a builder's report seem unusual to me.
Rates don't work like that - councils essentially decide how much money they need and divide that among all residents based on your house value as a share of the sum of all house values. If all houses double in value it makes no difference to the amount each household pays.
Gen X
These are the most happy comments that I have seen you post . . . . this news has been more effective for you than a couple of much needed "happy pills". :)
P.S. Mind you, this frame of mind is not consistent with you owning "multiple properties in a number of countries".
"'If sellers are confident that they’ll be able to purchase after they sell, we could see this number continue to climb... Typically, more stock would result in cooling prices because buyers have more choice, but we haven’t seen that happen yet,' said Vanessa."
The problem with the assumption is that there's an expectation on property upgrade or downgrade when there appear to be more inventory available in the market. However, due to credit constraints concurrently created by both RBNZ and the Labour government, that transition may be only a pipe dream for aspiring movers.
Housing in this country is not a normal good; therefore, basic demand and supply do not apply.
With these in consideration, rising inventory availability is likely short-lived and the talk on major prices cooling are unrealistic.
If you have just received your pre-approval to buy an average Auckland house, that option in your hands by itself is worth about $29.6K- yes, that email or letter you got from your bank is worth money, don't see it go to waste!
January-s are usually the dip month for residential real estates in the country. Your opportunity to buy the dip is THIS MONTH. If you're serious about moving into a lovely home to call your own, it's time to cut short your holidays and get out there to find something before Summer comes along and wipe your hopes away.
Be quick!
Driving round regions there's building going on everywhere and from the sounds of it people are fleeing cities esp Auckland, so you'd expect the listing count to increase.
Could bode well for Auckland prices to rationalise but then again I imagine the immigration tap will be turned on in 18-24 months.
Bit of a crapshoot really, if I were to gamble I'd say the global economy will take a fall first and take us with it.
Where do you buy substandard materials ? In my experience there are just no materials to be had at short notice. The timber producers are taking the piss (when you consider log prices are 33% down from the 120 a T they were getting), gib is a 12 week wait, gib bought all of Elephant boards stock to keep the ball rolling. The whole sector is maxxed out. I think you will see a lot of vacant sections with consents/plans coming to market shortly.
Wholesalers are using these conditions to jack the prices, best opportunity ever to crank it with little whining from the crowd.
NZ has relatively more gas in the tank, as in, lower public debt, and room to move on interest rates (albeit not much), and half decent fundamentals to survive in the short term.
Covid is like a cattle prod that is and will shake vulnerabilities in economies across the world. We can see fractures in the Chinese economy already, many parts of Europe were already on the ropes, you've got countries like Lebanon and Turkey suffering eye watering inflation. Covid relief monies are coming to and end, and were more needed elsewhere to prop up economies.
As for the catalyst hard to say.
Anecdotally a lot of small builders going bust or just shutting up shop due to severe materials shortage.
One builder I know has told his staff that they are welcome to take casual or seasonal employment for now as there just isn’t enough timber to do any jobs with.
Not to mention materials destroyed by the weather due to lockdown/border controls. There is a half built house getting demolished around the corner from me due to the framing being weather damaged. I suspect that will cost the builder and the first home buyers who were building it very dearly.
Auckland leads the way...in up as well as when falling.....
https://finance.yahoo.com/news/fed-vice-chairman-to-leave-two-weeks-ear…
Fed Vice Chairman Richard Clarida will leave the central bank two weeks earlier than planned, following increased scrutiny into financial transactions he made ...
......Will they and do they work for economy and public at large or for for self. In USA it is stock and house, whereas in NZ it is mostly housing...how many of those decession maker has used their power to increase their wealth.
Great news from the stables says the "Crazy Horse" .... let's see if we can get the total stock of all NZ residential property to have a market cap. of say at least 5 trillion kiwi pesos ! .....happy daze are indeed ahead for all you "astute" investooors out there ! .... neighhhhhhhhhhh ! he says, diving back into that bucket of oats !
I did the sums recently and If house prices doubled every ten years then the average NZ house will be "worth" $1 billion in 100 years time. From memory the average wage would be something like $1mil P/A at 3% inflation from here, so houses would be 1000x income. There are people that honestly believe that will happen. I guess some people will believe everything they hear from a Church...
Unless there is a civilisation ending event it could end up something like that, with almost everyone dependent on the govt (so house prices irrelevant) and a minority of robotics geniuses earning 9 digit salaries (or profits or something) competing with each other for real estate in safe pockets with no view of the slums.
It all makes a lot more sense when you realise that:
- The lower quartile of the housing market is now propped up by accommodation supplement ($30m+ a week of Govt money going into sustaining current prices!)
- The top half of the market depends on (a) what buyers can afford to pay, which is a function of interest rates and equity levels, and (b) buyer confidence in future prices
Higher interest rates will slow the growth down, but, given home owners have $1 trillion in equity, and accommodation supplement is being thrown out of the door, how likely is a drop of more than a few percentage points?
The average house is now $1 million. The average rent would need to be 50k a year (1k a week) to get just a 5% yield before expenses. No one is investing in property for the yield anymore.
In fact the median rent in NZ is now $560 a week ($29,120 PA assuming fully occupied), the median house price is $1mil, so current average yield is 2.9% PA before expenses. Take out rates (say 3k), insurance (say 2k), maintenance (say 5k), empty periods (say 1k), and it is 1.8%. Without capital gains (and now without tax advantage), why would you bother?
Yes, I was specifically talking about the bottom quartile of the market. My hypothesis is that the floor price for a small family home in low decile urban areas ($500k - $600k) is determined by what people on low wage and / or benefits can afford to pay in rent. This in turn depends on accommodation supplement. If you run the numbers the yield comes out at a bit over 4%. Take out rates etc and this drops to about 3%. It is pretty crap, granted, but a major drop in prices at this end of the market looks highly unlikely.
You are not wrong with your reasoning.
But a minor caveat would be that the peasantry occupy the slums, so the "price" of the average rental will be a bit lower than the average price for all houses.
But the point still stands, indeed, it is a speculative mania and it can only end with serious wage inflation (currency debasement) or a serious asset correction.
Same old comments from the same old people as prices just continue to rise. Some people need to react to change and adapt instead of living in denial. BOP has had some of the highest gains over the last year and had I "waited and watched" on the sidelines then I would have been screwed.
No. We need houses prices to go down. We are hands down the most expensive place to buy in the developed world with one of the lowest population densities. Its manipulated and purely credit based speculation.
Anyone arguing against this comes from a place of Greed. Or just having being engrossed in this way off life for too long. Or just has the blinkers on. But either which way it's a national embarrassment we've let it get this far ahead of us.
Like any impending revolution or Disaster, we can head off the worst effects with relative small changes now. Rather than wait for the social or economic explosion that will follow. Here's hoping the cccfa is the catalyst for the correction we need.
There's blood in the water for sure based on the emerging property data shared in some posts here. I thought the interest rates would be the main head wind but it looks like the tightening of credit is eclipsing that by some way at the moment.
It feels like we're approaching a tipping point. If the interest rates go up again at the next review then we may see a run as investors in particular decide to pivot out of residential property.
Omicron may have other ideas and we may see a postponement all of this due to a change in Government behaviour around rate rises, border opening, subsidies and so forth.
If I was a betting person, I'd say the traffic light system will endure with us remaining domestically pretty open to the vaccinated, and Orr will have to respond to the inflationary pressures with modest, slow upward changes in the OCR. This will signal investors that the chances of more cheap money is now too small to expect a revival of the housing furnace and the exodus will gain momentum.
New Zealand manages to out-bubble even Canada.
https://www.youtube.com/watch?v=mEgCI5fd5s4
Trudeau and Arderp are so alike with their uselessness and waffle it is uncanny.
New year, same headline. Property the only game in town. Brock and his DGM crew remain in the mud. The majority of these comments are misery merchants trying to speak a crash into existence. Zoom out from those charts and the price direction only moves one way! Buy the house or get left behind, it really is that simple. No sympathy for those who can't get this.
B727 - I have been on both sides of the property investment fence so your characterisation of my thoughts on the property market are as accurate and polished as your other “views”. Your post has the whiff of desperation. When you have to resort to trying to whip up investor interest on a site like this you should just be honest with yourself and sell before you drown.
B727 I think you do have to appreciate there is now a huge separation gap between those that are in and those that are locked out. We now have a very divided society and you would have to make some pretty big compromises to get into a house that the next generation are not prepared to make. The end result is a percentage of the population that are now pissed and DGM struck.
20 years time. A Melinial dominated parliament votes in a death tax. 33% of your estate thank you very much.
They will need it to pay back the govt debt and help fund the cost of climate change. Which present generations are doing thier best to ignore.
Social revolution doesn't need to Come with guillotines.
EXACT detail needed and is missing.
Total stock is to what is available.
Stock OTM is what they mean.
Also and crucially, WHAT is OTM.
In Orewa 75% of what is listed is not built yet and price is not what it will cost in end if developers having trouble finishing them.
People who currently live in the house to sell are the crucial variable and this is not separated out.
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