A flood of new listings onto an already swamped housing market in October pushed the total stock of properties for sale up to a 10-year high.
Property sales website Realestate.co.nz received 11,572 new listings in October, up 21.4% compared to October last year.
That pushed the total stock of properties for sale on the website up to 32,339 at the end of October, the highest level it has been at that time of year since October 2014.
That means the stock of properties for sale is already around the numbers we would normally expect to see at the very peak of the summer selling season in March.
Unless there is a huge surge in sales over the next few weeks, the market could end up with a large stockpile of unsold properties when it all but closes down for the Christmas/New year break.
The high level of new listings suggests there's a substantial level of as yet unsatisfied demand from vendors wanting to sell their properties, but the growing stock level of homes for sale is tipping the market further in buyers' favour.
"While higher stock levels are typical as the spring selling season ramps up, these levels reflect trends we haven't seen since 2014 and 2015," Realestate.co.nz's latest monthly report said.
"All regions saw positive stock growth both month-on-month and year-on-year, with the majority showing double digit annual [percentage] increases," the report said.
The biggest year-on-year increases in stock were in Gisborne (+81.2%) and Wellington (+52.9%). See the chart below for the full regional figures.
Market conditions are further complicated by rising vendor price expectations.
The national average asking price on Realestate.co.nz has increased for three consecutive months, rising from $816,796 in July to $893,357 in October.
That could leave real estate agents potentially dealing with the twin difficulties of an overstocked market and vendors with unrealistic price expectations, in the lead up to Christmas.
However buyers will be happy because the market is moving even further in their favour.
You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.
47 Comments
"The housing market is moving further in buyers' favour"
So from 'absolutely, financially crushing' to just 'still way over expensive' then?
When the market has finished its 'correction' - however long that takes - it might take some time until anyone wants to be a Buyer at all. They'll have witnessed in real-time what happened to recent Buyers; they bought and prices kept falling, and will not want to be one of them any time soon.
" the twin difficulties of an overstocked market and vendors with unrealistic price expectations" gets solved in only one way, if % rates do an about-face.
Unlike NZ, the Aussies have money, and are prepared to spend it. They are still short of builders over there, so plenty of work available. Especially on civil projects, and the upcoming Olympic preparations.
Building more homes
The best way to ensure more Australians have a safe and affordable place to call home is to boost housing supply. That's why National Cabinet has agreed to an ambitious new national target to build 1.2 million new homes over 5 years from 1 July 2024. And we're providing billions of dollars to help get there.
Through National Cabinet, states and territories committed to change planning laws to build more homes closer to where people want to live and work. It'll mean people can be closer to public transport and reliable services and connected to their friends and family.
The Government is making available a further $1 billion to states and territories to deliver new housing – including for connecting essential services such as water, power, sewerage and roads. This investment expands on the $500 million already committed through the Housing Support Program.
We've announced incentives to increase build-to-rent accommodation, and as part of the National Housing Accord, we'll also build an additional 10,000 affordable rental homes.
On top of this, our $10 billion Housing Australia Future Fund will build 30,000 affordable and social homes.
https://www.pm.gov.au/our-work/housing-australia-build-rent-buy
People yearn to upgrade to better dwellings (in superior locations). And right now is no exception.
For instance, the wealthy remain ultra-keen to move into Ponsonby - 50 years after the gentrification of the suburb commenced. Indeed, snobbery plays a large role in the Auckland housing market - and real estate agents milk it for all it's worth.
Good luck to them - it's still way beyond the price level which commoners like me can afford. Anyway, I've no interest in keeping up with the Joneses. Though I've no hesitation in parking my 50-year-old Hillman Hunter outside their posh homes when I visit my barber. Disgusting, I know.
TTP
A flood of new listings onto an already swamped housing market in October pushed the total stock of properties for sale up to a 10-year high.
Given our rising job insecurity, a counter balance to clear this listings bloat of still overpriced homes doesn't look encouraging at all. It only points to prices trending further south.
There arent many reasons for prices to rise.
Young skilled peeps who will make good money are off to Australia coz it's cheaper to live and had far better public services/career prospects.
Immigrants can't afford prices to rent and buy.
Those who are staying are worried for jobs and income.
I’ve been banging this drum for a long time, but we don’t have a shortage of housing. We have a utilisation issue that improves when times get tough and as the elders sell larger homes.
This isn’t a blip, this is a shift that will take some time to work through.
Those holding under-utilised properties without the capital gain are starting to understand how expensive they are cashflow wise.
Demand isn't fixed, its affected by price. So as housing gets more unaffordable the "shortage" goes away. E.g.
- Dave who was looking to buy his first home moves back in with mum
- Young couple sticks with their mouldy 2 bed unit because they can't afford the next step
- Boomer Joe doesn't buy another bach
Anyone who talks about shortages doesn't really understand supply and demand.
The price / demand relationship is two-way too. Nothing predicts house price changes better than the volume of sales (for example).
If it was toilet rolls you could say there was a shortage if you were unable to buy them for a reasonable price (e.g. cost to produce + a reasonable margin). But you can't produce land and existing land is heavily regulated, the price is dictated by supply and demand.
There is always a surge of listings around this time. Add in the large pile of already unsold listings, and normal debt levels, extended recession, and future high earners exiting to Straya in near record numbers and... boom. The real question here is when do the banks start to shoot the over leveraged and strung out debt junkies as they continue to fail to service their debt obligations?
When will they actually do their job....
'Investors' selling up? Perhaps they've read my posts about when a well-designed CGT should start?
I suggested 1900. That would catch everyone.
And it'd start generating tax revenues immediately which would mean PAYE reductions immediately too.
Thank you UK Labour Party. ;-)
The ones selling up are likely to be Boomers moving into retirement villages
Have you got a read worthy link to back this or is it nothing more than an assumption? If this be true then combined with Brightline jumpers it could be quite a wealth transfer in play being met with poor demand.
33,000 properties for sale? That's about 3 - 5 months worth of sales (depending on how stupidly hot the housing market gets).
We've been running at about 6,000 sales per month for the last couple of years. Pre-Cvid we were running at 8,300 per month but we did have a spike during 2021. So, my rough guess is that we have latent demand of around 2,000 per month x 24 = 48,000.
Anyone better against the housing market is braver than me.
I can’t help but wonder if there is a chicken and egg thing here. Most sellers will also be buyers but few sellers will be wanting to make an offer on a property until they have an acceptable offer on their property. Hence the number of properties on the market keeps rising but few moving
We thought about putting our place on the market as an ‘upgrade’ looks potentially attainable for us. The problem is we would need a sharp price on the sale of our current place, and I struggle to see that happening right now. So we aren’t going to even try. We are relatively happy where we are anyway.
Yes the upgrade (or downgrade) path seems scary. You either have to:
- Make conditional offers based on your place selling for a good price (this will significantly reduce your bargaining power)
- Buy and hope you can sell your place for something like what you want
- Sell first then hope you can still buy at a reasonable price
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.