The buyer's market for residential property looks set to continue this year, with the number of properties for sale the highest at the start of a year since 2015.
Property website Realestate.co.nz had 27,732 residential properties available for sale at the end of January. That's up a whopping 39.4% compared to the same time last year.
That was the highest level of stock available for sale on the website for the month of January in eight years.
The relative slowness of the market was underscored by the fact that January's high stock levels occurred in spite of the number of new listings received during the month dropping to 6646, down 16% compared to January 2022.
Perhaps unsurprisingly, properties also appear to be taking longer to sell.
The average length of time properties were advertised for sale on Realestate.co.nz in January was up 25% compared to January last year.
Asking prices are also falling.
The average asking price of properties advertised for sale on the website in January was $889,036, down $131,816 (-13.3%) compared to January last year.
January's average asking price was the lowest in any month of the year since September 2021.
But even those prices may be too high for some buyers, leaving many vendors disappointed.
Realestate.co.nz spokesperson Vanessa Williams said vendors were either taking longer to find a buyer or were eventually deciding not to sell when they failed to achieve their expected price.
"We hear from agents around the country that sellers have lowered their price expectations but that their expectations are often not as low as the market in their region," she said.
"Agents are having to work hard right now to find the middle ground between what vendors want and what buyers want to pay," she said.
The charts below show the total stock levels, number of new listings and average asking price in each region in January, and the percentage change compared to a year ago.
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65 Comments
Talking to local agent she said "there are no buyers". Had a look on her face like a ferry passenger that's just been asked to put on a life jacket.
There are no buyers at the "Price by Speculation" price points. Reality - next month interest rates will be over 3x that available during Covid.
Do the math.
Do the math.
The problem is people don't. Too many blibical prophecies such as 'house prices double every 7-10 years'. They need to rethink the balance of the purchase as a consumption good and an investment / savings vehicle.
Not looking at you Granny Herald.
Definitely needs to be some education on investment portfolios and risk for Kiwis. It surely is an systematic economic risk if people have too many retirement fun eggs in too few baskets.
Definitely needs to be some education on investment portfolios and risk for Kiwis.
Adrian Orr said that housing is a 'consumption good'. I feel like I'm the only person who heard that.
housing is a 'consumption good'
It should be included in the CPI figures then shouldn't it? Imagine our inflation figure if that was the case!!!
As a general comment, most of the population (est. >90%) don’t think critically on anything, let alone matters of finance.
Well you have to be honest in that you will only know what house prices will be in 10 years........ by waiting 10 years. Could they still double from the bottom of this current market, sure they can.
So in 10 years they may be back at last year's prices?
WTF they are already! Just look!
WTF they are already! Just look!
Carlos everyone is aware house price’s are falling at the quickest pace seen in recent times even faster than Ireland and look what happened there. You seem to have no idea what’s going on with house price’s.
They also rose quicker than any point in recent times. It's not an analogous situation to Ireland circa GFC.
And therein lies the issue with so many saying this is the financial reckoning unfolding that's been in the wings, because the current issues are related more to a global health event than the status quo imploding on itself.
Maybe the two things will occur at the same time, but it seems fairly brazen to weight your view on it being all about the latter whilst almost totally ignoring the rather obvious former.
Covid is now irrelevant. The only thing relevant is interest rates and the availability of credit - whether they go up or down, how much banks are prepared to lend. What actually causes central banks to put interest rates up or down doesnt matter, the outcome is the exact same. Arguably this time its worse than the GFC because now we have inflation as well has higher interest rates, so interest rates are going to stay higher for longer unlike the GFC where central banks cut interest rates rapidly and implemented Quantitative Easing in order to save the housing market.
The one that makes me laugh is " you never lose on property" ....
I've brought many a property of couples that have lost by...
1.buying when high and divorcing when low
2. over paying with big mortgages and then losing work...
3. Following a dream on mum and dads inheritance then trying another urgent dream 😃..
I love it. . .. stupidity is quite a big industry in NZ .
"I've brought many a property of couples that have lost by..."
Where did you bring it to?
Some are genuinely unlucky.
Btw Its not just property that stupid people manage to stuff up
There are plenty of buyers, just very few buyers who are prepared to blindly jump into insane amounts of debt to pay an over inflated price for a property that will be worth less in 12 months time. Many vendors still have their heads firmly in the sand.
Good point. "There are no realistic sellers" might be more apt, or is at least the other side of the coin.
I agree, we are in a position to buy having sold months and months back, but list prices here are increasing ( see Wairarapa on the above chart) despite the HPI rolling back to what it was two years ago. We think there are either a lot of greedy vendors out there or it is possible that agents are offering high appraisals to ensure they get the listing - there are way too many agents here, a legacy from the heady days of COVID cheap money.
Whatever the reason we are not engaging as a buyer; we ring and ask the price and if it’s too high we scrub the house off our list. At the moment very few houses on our list.
Agree. Agents misrepresenting financial reality to secure the listing, and greedy vendors is whats happening. The agents are setting the sellers up for an extended period on the market as prices continue to decline.
Can verify, have spoken to numerous agends around houses that have been relisted several times in Nelson/Tasman and they have all said the same thing:
Previous RE agent listed the property at a price which didn't match the current market.
Most hilarious part is that even the newly listed price is still far above what the places are worth
Are you wanting lifestyle block
100% smudge02. You are very wise. From the original Smudge.
Time to start looking for a new job. Most real estate agents will struggle over the next few years
Time to start looking for a new job. Most real estate agents will struggle over the next few years
Could be a good wicket for those who understand how to sell in this kind of market. Remember the ABC: Always Be Closing.
Agree with all above!...
Owners who need to sell will drop thus forcing the rest to match... So on so forth until ... Oh looky looky... We have a recession ✅
Hi Beanie,
Sadly, REA's can't necessarily be relied upon. They tend to twist the facts in their own best interests - which boils down to maximising their commission. Of course, there are exceptions but they appear not widespread.
It's wise to take what REA's say with a grain of salt. Often, the opposite of what they say holds the truth. Avoid being gullible.
TTP
The sellers are still expecting unreasonable prices. So i think it's a standstill at the moment.
The bigger they are, the harder they fall.
And where is the biggest of them all, judging by that last graphic? Auckland, our largest city on many metrics? Wellington, our capital city?
Nope - Queenstown. The epitome of a tiny town, kilometres from everywhere, based on property speculation. (Tourism! I hear you say? That's just the excuse...)
When the brakes go in the SI Lakes area from Aussie and Auckland buying in Queenstown, half of the locals working who work in the construction run the risk of being unemployed and having to relocate elsewhere. Will indeed be a mess.
That's your opinion, but what is actually happening there?
Totally agree, have had Queenstown ski season passes the last few years and spent AKL lockdown in QTown. I used to ski there in the 1980's as a uni student. I know a lot of locals who are mortgage free, but they will all tell you at 1am after too many beers/wines etc , QTown runs on construction, when it stops its all over.
As for the regular jobs, it’s all high school students run off their feet. A few desperate carrot stuffers in the galleries. But mostly high school students. Being there recently, I was being as helpful as possible every encounter. Behind the shop windows it’s a flustered mess. Best keep to the mountains and tarns
Pissed local anecdotes aside, construction is 13% of Queenstowns economy.
Going to need more shades of green for "Total Housing Stock".
It's a buyers market at the bottom of the price curve. And a brutal market (for buyers and sellers losing equity) until it gets there.
Some folk have realised they can slave at their jobs for a lifetime and still hit retirement with debt to the bank. Those are the folks holding back. They'll be sweet if they can just hold back.... and hold their jobs, and their marriages and keep their breeding in check.
Check out the speculation losses. Awk and Well have Welly have rolled back to pre covid prices, and the regional markets are signalling they are about to start the similar decline. The talking heads are also predicting another 20% decline could be on the cards. Both links from Granny Herald the Property pumper.
Anyone buying in the next month better be well funded, or safe income and planning a long term hold.
Poppin that Corn
The talking heads are also predicting another 20% decline could be on the cards.
That's not at all what the article says. If anything, it's saying that prices have nearly bottomed out:
Annual house prices continue to track down with the market expected to fall between 15 and 20 per cent from its peak, potentially hitting the trough in the second half of this year.
Prices sticky on the downside. Whodathunk?
If you don't have to sell then don't. That said a very large chunk of mortgages are rolling from 2% to something around three times greater. Buyers know this. Have fun.
Roger, 10-4, will do!
Anyone watching the auctions today? Had a quick look this morning - my first for the year. They are a bit grim.
RW Marsden last Friday .. going once, going twice, going... passed in!
All properties now for sale by Tender . WTF... That's just spin for" By neg.... But we want to pressurize the buyer into acting before a date" bullcrap!
RE Agents are below car salesman in the "Bottom dwelling gauge"
.
Indeed. Greed vs ever declining reality. Feb OCR hike anyone....?
I hope it's 1% 👿.. it's time this overindulged country was brought back to reality!
"Agents are having to work hard right now to find the middle ground between what vendors want and what buyers can pay," she said.
FIFY
Yeah and if the middle ground is somewhere higher than where buyer can pay, still no sales happen.
many vendors still have unrealistic price expectations
Could be me, I just turned down a pretty good offer.
Yvil did you miss selling at top dollar end of 2021.it will be years maybe a decade until we see price high’s again. Many people and investors like yourself will be in for big shock when refinance time comes. Losing 10% or 20% is better than losing the lot.
It's the house my mother-on-law lives in, so I was not going to sell it at all, but she had a stoke in October 2022. We were hoping she would recover but alas she's still partly paralysed, so she needs to be in a smaller place with care.
Worried about the apartments on the way in St Mary’s Bay?
House prices are returning towards something rational. However inflation of the NZ$ is high and who can predict where it might go. I'm confident that however far house prices fall there will always be someone wanting to live in my house but the same sum of money in the bank is no certainty - just because NZ has never had hyper-inflation doesn't mean it can't happen.
Having lived in London during the seventies I bought in Auckland with no idea that property prices would go crazy (I mean I never expected both right and left govts to behave so stupidly). I bought as a hedge against inflation.
Have a family member trying to sell ATM. No buyers, it's true. Mexican stand-off.
Indeed. It's not that people don't want to buy, its that they cannot due to a retreat in the accessibility of credit.
That and overall negative sentiment. If interest rates, consumer and construction costs are doing nothing but trending upwards with seemingly no end in sight then that's not an environment most people are wanting to make larger financial decisions in.
If I am reading this correctly the tables actually look pretty good for Welly - total stock up less than 10% and new listings down 26.5%. Asking price down a modest 1.8%. If there are some sales and new listings stay down then the tables may turn on the buyers. I also see that ANZ are cutting rates from tomorrow - the banks clearly think inflation has peaked and in the medium term rates are coming down (albeit we may be in a recession by then). I don’t think it will take too much for fomo to make a come back.
The greedy ANZ just want to take in more money and pay out less..
Who has the best data .. Trade me who has 38,000 listings including all that REINZs listings plus all the non RE agents an private sale listings or.
The 27000 that the REINZ site has...
Note: trademe has 30% more listings which means the REINZs data is 30% inaccurate!
The sample size is 30% smaller. It may be less accurate by only a matter of degrees, depending on how different trademes extra 30% are.
Trademe also lists a lot of relocatable buildings under 'Property for Sale'. Thousands of them, last I checked.
A relocatable building is only 'property' insomuch as a car is someone's 'property'.
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