The rest of New Zealand's property market is following Auckland in turning into a sellers' market as the level of houses for sales drops toward its long-term average, property listing website realestate.co.nz says.
In the site's latest monthly property report, CEO Alistair Helm said inventory of properties for sale in June fell 10% from May, following rising levels of sales and fewer new listings.
Inventory levels were down 18% from June 2010.
"The shift in the market that was seen in Auckland last month is now being reflected in other main centres of Wellington and Otago, as well as the regional centres of Bay of Plenty, Queenstown, Waikato and Nelson," Helm said in a media release.
“These are regions that have not been sellers’ markets for a very long time. If things continue, it’s likely that we will see a shortage of listings to meet buyer demand grow even further," Helm said.
Meanwhile, as housing stocks had fallen, the average asking price had remained steady at NZ$415,053, up slightly from NZ$414,308 last month, and down 2% from earlier this year, Helm said.
“Although we are now clearly heading towards a sellers’ market in New Zealand, the steady asking price shows vendor confidence is strong, but not excessive," he said.
The figures in the June Property Report were similar to the trend that occurred when the property market responded to economic pressures following the onset of the global financial crisis in 2009, Helm said.
“The country is now delicately poised on the long term average of inventory, and an ongoing shortage of available properties looks very possible,” he said.
See Helm's commentary below:
What began last month as an early trend towards a sellers market has taken on a faster pace through June. Nationally whilst the inventory levels hover just above the long term average of 41 weeks, key regions of the country are now firmly set in a sellers market. This situation has the potential to be exacerbated by the traditional reluctance of property owners to list their homes through the winter period. During the winter, sales per month tend to drop by around 5% as against a normal month, however new listings tend to fall more significantly by up to 15% as compared to a normal month.
Heading into the winter period with a growing number of regions seeing inventory levels below long term average could well result in elevated buyer demand with a potential to see property price appreciation. Those regions are Auckland, Queenstown, Bay of Plenty, Waikato and Otago.
Countering this potential for price appreciation is the fact that in June the asking price expectation of those new listings coming onto the market at $415,053 showed no change as compared to May and in fact represented a 2% fall in price as compared to the recent 3 month period.
Asking Price
The truncated mean asking price for all new listings in June rose very slightly from $414,308 in May to $415,053. On a seasonally adjusted basis the asking price rose just 0.8% in the month indicating a degree of caution amongst sellers.
The overall trend of the past 2 years continues to show a slow but steady strength in asking price expectation.
New Listings
The level of new listings coming onto the market in June fell again to 9,111. This represented a 18% year on year decline but a 2% seasonally adjusted rise from May.
On a 12 month moving basis the number of new listings in the past year totals 125,848 as compared 145,920 for the same period a year ago – a fall of 14%.
Inventory
The level of unsold houses on the market at the end of June continued to fall from prior months. June reported 47,738 down from 48,352 in May and 50,398 in April.
The recent relative strength of sales as seen in March through to May has now stared to see a clearing of what has been a high level of unsold houses on the market over the past 18 months. Heading into Winter, a time of traditionally weaker listing will likely see this inventory level fall further in coming months.
(Updated with commentary, link to property report)
Housing inventory
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55 Comments
And for an update on the Aussie housing market (HT Hugh P):
Housing prices fall in year to May - Sydney Morning Herald
UPDATE: Australian Credit Growth Remains Sluggish In May - WSJ.com
I have been watching the number of listings in 2 markets where I have rental properties , Nelson and Dunedin. Both properties are in "more desirable" parts of town rented to excellent long term tenants at $550 and $397.50pw respectively. The number of properties for sale in both suburbs is the lowest I have seen in two years and the number of rentals available in both ( for 3 bed houses ) is two and six respectively. Asking rents appear to be pushing higher as well and any decent property is gone really quickly.
I put this down to the "Christchurch effect" as both Nelson and Dunedin would be popular options for people planning on leaving. Nelson's new house building activity in the last three years has been extremely limited so that will push up prices as well. Dunedin's version of Merivale and Fendalton are Roslyn and Maori Hill and I wthink those areas will only get more expensive over the next wee while!
Same sentiment from this lot as last month. Just becuase supply falls does not mean it becomes a seller's market. Demand must stay constant or increase for that. Could it be that demand is falling and so people are reluctant to put their houses on the market? Surely if it was a seller's market we'd see a jump in the asking price?
Here it Auckland we have some suburbs that are mostly definitely a sellers market and some the complete opposite. And they should divide their inventory in crappy ex-rentals that PI's are desperately trying to offload and that no one would want to live in (apart from as a rental) and those that make for desirable homes. There's a difference that would be interesting.
It's interesting that Alister Helm states that the Waikato is now a sellers market. I moved to the Waikato region from Christchurch two months ago.
I have been investigating the housing market throughout this region and it is uniformly dead. The number of properties that are actually selling is well below the long term averages. That is why properties are currently selling for at least 10% below GV.
What is actually happening is that after a property has been on the market for a reasonable length of time without selling it is put on the rental market. The house that I am currently renting was in that situation. This means that the number of houses for rent in this region far exceeds demand and as a result there are a large number of houses that are currently empty.
When all these reluctant landlords get tired of a zero return on their properties there will a flood of houses for sale. I would suggest that Alister Helm get out from behind his desk and see what is actually happening on the ground.
The Real estate industry's postive outlook never ceases to amaze me .
I will concede that the destruction of houses in Christchurch has pushed up demand generally , but there are too many negative factors otherwise known as "economic fundamentals" at play to epxect demand to sky-rocket .
These are
1) Banks require significant cash deposits from buyers ( in $ terms)
2) NZ households are still highly indebted and they are not borrowing freely . There is a tend to paying down debt
3) There is upside risk in interest ratres . They will go up .....making Mortgages more expensive
4) Demand from migrants will remain weak becuase the NZ$ is so strong against the GBPound , we should not expect sensible Englishmen to bring all their cash here ( for now). Dont forget that UK migrants are still our bigest sources of migrants.
5) The general level of house prices remain out of kilter with historical trends . Most agents laugh this off saying this is the "new normal ", but markets always revert to the average over time .
6)Average house prices are about ten times average annual income when the historical norm is 5 times . We need to recognise that there is a structural change needed.
7) Spending in the economy is depressed , retail figures are showing no growth .
8) Dr Bollard has conceded that the recovery is aneamic.
9) All this filters through to company profitibility , and then wages . This is unlikely to change quickly .
Given all of this , how can anyone have such a rose tinted view of our current reality ?
Boatman, and just about everyone else... particularly Gareth and Bernard...
You're all missing a key point here - follow the incentives and the money!
Helm's business is selling marketing inventory to vendors of real estate. Because of the slow down in listings his volume of 'unsold' inventory is rising, which conversely means that his revenue is down.
So what is he to do? Drum up more listings and shift some of that inventory and get the revenue pointing in the right direction. I have read through his report and I cannot and various economic commentary and I cannot for the life of me see where this 'sellers' market is coming from.
Sure, there will be time when small pockets of the market are short property and there are also time when parts of the market are long. But to make overarching claims such as he has is mischievious and exposes his underlying incentives for all to see.
In short the data is the data, but I would prefer to have commentary and analysis from someone who's income is not linked to the direction the market is pointing in at any particular point in time; that person would at least have some chance at credibility.
Gareth and Bernard... when are you going to call him on this... or are you just turning into main stream repeaters too?
A lot of people have withdrawn their property from the market because it wasn't selling. They can't get the stupid high price they are still hoping to get. Some of them are becoming convinced that the destruction of a few Chch houses now means their own will magically become a lot more valuable.
Never has a market been as populated with utterly clueless people since the heady sharemarket days of the mid 1980s or the dot com bubble in 2000.
The Tyranny of Positive Thinking:
GBH,
This article does a pretty good job of explaining "blind optimists" v "realists"
http://www.nytimes.com/2011/06/26/opinion/sunday/26shyness.html?_r=2&pagewanted=1&smid=fb-nytimesIts not complex to read....
regards
It's all just so difficult for you, isn't it?
http://www.nytimes.com/2011/06/26/opinion/sunday/26shyness.html?_r=3&pa…
Is there a "not so blind but choose to have a positive outlook on things" option? Looking at the positive side of things, while remaining realist, is not so bad you know.
My grandmother often used to tell me to do this and she's 101 now so my conclusion is that being positive/optimist can't have too many adverse health effects. Whereas looking at the dark side of everything and worrying about all the horrible things that may happen all the time must be a bit depressing in the long run. Maybe you could try being positive for a day or so, see how it feels ;)
" Realistic optimism " may be the term you seek , Elley . ...... and it is indeed refreshing to stop watching the nightly TV news shows , and to dip into an improving book instead , or to assist the kids with their home-work .
.... the Gloomsters are always here @ interest.co.nz , should you get irrationally exhuberant , and desire pulling down a peg or two ... The head honco , Bernard " chicken-little " Hickey , is most obliging should anyone wish a walk on the dark side .
No TV for us GBH but a nice library instead (yes, we are kind of weird). We'd rather use our spare time to play outdoors, read and do other activities with the kids. So far it hasn't caused too much grief (and we do watch a DVD or two on the computer each week). Can you believe the 5 year old will cry if I don't write some maths tests for her to do everyday?! As for not reading with them everyday, it's just not an option they give us!
But you are right, whenever I feel a little too optimistic, all I need to do is come here to curb down my enthusiasm :)
Bernard Hickey : Do you fully realise the magnificient service that you're providing for the world ,... Elley has summed it up beautifully :
..... " whenever I feel a little too optimistic , all I need to do is come here to curb down my enthusiasm "..........
Ahhhhhhh !....... such high praise , it must give you a warm inner glow , Bernard !
Good to feel great Gummy – it seems it is your day - hammering those bloody realists -all day long.
....... because Bernard promised me that after my 10 000 'th blog on this site , he'd give me his entire collection of Paula Bennett in a bikini , photos ........
........ hmmm , 4 687 blogs down ....... , 5 313 to go ......
" On my way to heaven , we shall not be mooooved ! ........ "
I have only a little window of time left....but just for you GBH and any who may care to indulge in a little of Hone's teachings and philosphy.
TRAGEDY.
Hone Harawira was visiting a Northern primary school and the class was in the middle of a discussion related to words and their meanings. The teacher asked Hone if he would like to lead the discussion on the word 'Tragedy'.. So our future illustrious leader asked the class for an example of a 'Tragedy'. Manu, a little boy stood up and offered: 'If my best friend, who lives on a farm, is playin' in the field and a tractor runs over him and kills him, that would be a tragedy.' 'Incorrect,' said Hone... 'That would be an accident.' A little girl raised her hand: 'If a school bus carrying fifty children drove over a cliff, killing everybody inside, that would be a tragedy.' 'I'm afraid not', explained Hone 'that's what we would refer to as a great loss'. The room went silent. No other children volunteered. Hone searched the room. 'Isn't there someone here who can give me an example of a tragedy?' Finally, at the back of the room, little Johnny raised his hand and said: 'If a plane carrying you and Mr. Sharples and Mrs.Tits was struck by a 'friendly fire' missile & blown to smithereens, that would be a tragedy...' 'Fantastic' exclaimed Hone 'and can you tell me why that would be a tragedy?' 'Well', said Johnny, 'it has to be a tragedy, because it certainly wouldn't be a great loss, and it probably wouldn't be a f#*king accident either!' Adios Muchacho's
The Tyranny of Positive Thinking:
I came across this site some months back.....interesting perspective...
One for Philbest
Alistair Helm used to be quite balanced in his views...now he's starting to fudge like Barfoots do...firstly, what is a sellers market? Does Alistair even know? When does a buyers market become a sellers market?...also he is looking at quantity of deals and then announcing it's a sellers market...but what about chch? haven't volumes dropped off a cliff in chch?
The fact is that we still have a property bubble in NZ, which is gradually being deflated by inflation, and it's not over yet.
I don't believe in buyer or sellers market hype. It's all just a big have. The housing market in general is a big have, just like the dotcom bubble, the tulip bubble, the stock market bubbles. Its rubbish to make a simple population who don't REALLY know how to invest money think that they can "get ahead" when in fact they are sealing their own fate. Ask any property investor, what is the number 1 rule of investing, and they won't be able to give you the right answer because they don't practice it and they dont know it, even simple concepts like time value of money they fail to grasp, and they call themselves investment "experts". Its pretty stupid. Sorry just ranting at the hypocrisy lol.
Agreed, Australia is worse than we are... Yeah you are 100% right. We're in brisbane, this morning petrol is $1.31/litre ($72 to fill my 2L car from empty), milk is $2 for 2 litres, my last electricity bill was $285 per quarter..
Australia newspaper is discussing how to protect the economy from mining boom, Greece crisis etc.. In NZ, we argued about productivity from period pain!
Chairman Moa I was in Queensland for a break in April and not withstanding the cost of petrol over there then, all the Australians I happened to talk to were moaning about the basic daily cost of living increases they were facing in such areas as petrol,food,insurances and power and alike. Your interest rates are higher than ours and we know a lot of aussies have big loans for those big houses, the chattels in them and new cars they drive around in. The whole world is facing increasing costs in basics. That is why housing is under pressure in Australia for the first time in years.
Years ago, I received two truisms from a real estate agent:
1. All buyers are liars; and
2. Most people buy a house within 1.5km of their existing place.
If the second point is true, then debates over buyers vs. sellers markets are a bit pointless on a national scale.
FWIW: I scour Trademe's listings for Auckland's Eastern Beach Suburbs and find it difficult to locate traditional family homes that aren't potential leakers. Those definitely seem to be a sellers market.
Selling stock numbers are most probably ONLY down because many sellers are opting to rent the properties because they can't find buyers willing to play the "mugs" game which is the NZ residential property market.
I suggest people check the MANY rental website availability numbers that were increasing big time post CHCH earthquake in many regions.
Apparently there is a property shortage growing in NZ?
www.stuff.co.nz/business/money/5218829/Signs-of-property-shortage
That's funny, cause anyone looking for a rent won't find that "shortage" unless in CHCH or parts of Auckland.
Anyone living under bridges at home yet? no?
What else do they expect to happen?, now coming up for 3 years or ridiculously low, record low interest rates.
On top of being among countries with the most lenient property taxes in the world.
If now doesn't favour borrowers it never will.
Now here we are encouraging the very thing, the excessive borrowing and consumption, that has destroyed economies like Greece, Ireland, and the US.
In spite of the fact that everyone is now fully aware of how damaging excessive debt is.
With no end it sight from our leaders.
Until it destroys our economy too.
Maybe first home buyers here, shut out by high prices, should be doing the same as this...
http://www.stuff.co.nz/world/asia/5222631/Annual-march-becomes-protest
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10736258
Greedy Nelson Real Estate agents taken to court over charging commission for a private sale. Lost. Now want to appeal.
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