Asking prices for listings on Realestate.co.nz rose 2% to a record high of around NZ$434,161 in October from September, but new listings fell 11% a seasonally adjusted basis.
Data released in Realestate.co.nz's NZ Property Report on unconditional.co.nz showed asking prices were highest in Auckland at around NZ$568,778.
Realestate.co.nz CEO Alistair Helm said the rise in asking prices reflected a high level of confidence amongst sellers, who had been encouraged by a high demand for property alongside a steep drop in inventory over recent months.
However, a steadying of the number of new property listings becoming available last month indicated that the market was balancing out a little, Helm said.
“Every October, the numbers of new listings tend to surge even higher than September as spring continues to roll on out of the winter dolerums. However, slower than expected September sales this year have precipitated a degree of uncertainty among sellers considering entering the market," he said.
The number of new listings in October (11,312) was slightly up on September (11,117), but was down 11% on a seasonally adjusted basis.
The combination of these factors raised inventory levels to 38.5 weeks, which was below the long term average.
Helm said the property market still clearly favoured sellers in most regions, particularly Auckland and Canterbury, where inventory has fallen to its lowest level in two years.
“What we’re seeing emerging here is a mixed-confidence picture. The market is certainly stronger than it has been in previous years, but it is continuing to be tight."
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36 Comments
Upwards price movement has a way of sneaking up. Eg 1988. 99 2000 suddenly you are left behind. Hopefully not too many have been discouraged from buying their family a home by commenters on this site. You are going to pay 400 to 550 rent for decent house in good area so you might as well buy and get. More choice.
You won't get 800k unless you're in Grey Lynn, Westmere, Pt Chev, Herne Bay, Freemans Bay, Ponsonby, Mt Eden, Epsom, Sandringham or Kingsland. Property values in these suburbs jumped so high in the latest CV that my friend's little do-up cottage in Grey Lynn is now over 1M - shocking aye.
It all has to do with increased liquidity.
The 2 income professionals that want to live in these areas to be close to their work are unaffected by recessions. The reserve bank keeping interest rates so low by recent measures is like red rag to a bull for people who desire to live in these areas.
In reality interest rates need to be kept a couple of percent higher in these areas to head off property inflation driven solely by increased liquidity i.e. people bidding up existing stock because they can borrow more money, not because they necessarily earn more.
I have been going to auctions in Greylynn.Same old lemons keep returning to the market every year.
The facts are its very hard to find a bargin in an areas that people want to live.
There is meant to be doom in gloom but most of the ones I have bid on have sold for more
I will just have to keep looking
There are a number of Auckland suburbs that have gone down in property values/prices recently. Remember to chose wisely. Eastern suburbs in Auckland is the place to be due to recent decrease in value but you'll get beaches, parks, reserves, cafes, restaurants, and close to the city. Hope this helps :)
More and more agents appear to be taking advantage over price uncertainty by using "price by negotiation". As these are counted in the above numbers as the mid point in the agents search price range (which could be a range of 200K) the "average asking price" (even if it is truncated) could easily be affected either way by an increase in the proportion of properties without a specified asking price.
For example, if the price *should be* $ 280K and the agent advertises it as a PBN, but with a search price range of $200 - 400K, it will count as an asking price of $ 300K in the numbers.
After all, its not what is asked, but what it sells for that counts.
It goes to show that Olly Newland has been right all along. He said over 2 years ago that the market would not crash and it hasn't. He said that people should buy in "leafy suburbs" meaning nice areas in good locations and we have the proof that these areas are indeed roaring up in price. He warned that rents would rise and they have in the Auckland region by up to 40% in the last twelve months. And he said that the share market was a den of thieves and people woiuld prefer bricks and mortar. With the worlds markets in turmoil and the share market worse than a drunken sailor thats exactly what is happening. Bricks and mortar are for ever . The gloomsters and whingers on this site including BH owe Olly an apology for doubting him .
In retrospect BigDaddy, Olly Newland also blamed the fall in NZ property markets on the stock market crash in the late '80's. He didn't see it coming then; and even though the markets are in turmoil now, he forgets the lesson he belatedly learned, last time. That is,when the money goes from one asset market, it has to be retrieved from another. The stock markets may be in turmoil; but so is the world economy, and Olly Newland will be able to chastise himself in the near future with the words, "Why didn't I learn my lesson...last time..."
Real terms, house prices will fall, have been falling, look around Big Daddy. What defines a bubble? Prices higher then people can afford. Markets always return to averages, they don't sit on averags they fluctuate around them. Way out, calling a house a good investment for capital gains, as a home and a place to live is understandable. An investment? Buy high sell low? Real returns?
I'm not surprised the RE market has stayed at lofty heights, afterall any market is an expression of the collective mind, directed by sentiment. The RE market is no different to any other where human nature is involved.
kiwi's have a deep seated belief in housing ownership and RE investment and to date that belief has been unshakeable, even at times when that belief is/was irrational. So the only logical conclusion to draw is that the RE market will continue on its merry way for the forseeable future.
Now sentiment in the NZ RE market could change, it could be a generational change or a single overwhelming event that triggers it. Predicting a change is the difficult part as we know.
One factor that I'd add, Matt s. We have an election in 3 weeks time. After that, who knows what whoever is elected will do. But if John Key is to be taken at his word, then 'not in my first term' is well and truely over, and with nothing to lose by having won a 'final' term, the economic winds of change may sweep through the New Zealand property market, as the alternative... 'more of the same' will just get us...well.. more of the same...and that is our road to Athens.
There is one big difference between this market turmoil and the '87 crash and its aftermath said Olly Newland. Back then the Lange/Douglas, Labour Government (continued by National's Bolger Government ) refused to cut interest rates. House mortgages typically stayed at above 15% p.a. for the next 4 years after '87 forcing a real estate hiccup that was entirely avoidable. Interest rates collapsed to "normal" around 1991-2 but by then it was too late. Now governments realise that high interest rates kill production and consumption and cripple growth. High interest rates are only justified if hyper inflation returns - which is something still very much on the cards - but not here yet.
There is no difference, BigDaddy, on the' nominal level' of interets rates when it come to political interference. If, as Olly Newland says, 'rates were held too high', then; just as equally, rates are being held too low, now. Olly Newland no doubt would say that's good for property; borrow whilst it's cheap etc. But that will not prove to be the case. Yes, rate will rise in due course, but not before they are engineered much lower first.( So on that basis, rates are still 'too high'?) And that will be because the wider economy is in such a mess that politicians see 'lower rates' as the only solution to a debt crisis. It may well be in the longer term. But long after assets sales have be forced out of the holders to maintain losses in other areas, or indeed, just to live. We are in 'slack water' time at time moment. The storm is seen, and coming over the horizon. How long will it take to get here? Who knows; but it will arrive.
Why don't the tossers that come here giving advice to buy buy buy ever talk about some of the real issues that should be taken into consideration when making an investment. One that springs to mind is liquidity, or more to the point how illiquid a house is. If you need to sell urgently in a slow market like today then you will have to take a much reduced price and perhaps end up in negative equity.
Anyone that gives financial advice without advising of the downsides is simply a charlatan.
If you want top use a good barometer for where the real estate market is heading, just ask people trying to sell a boat at the moment.
You said it scarfie. If you need to sell quickly in a bidless market like the US? 60% of homeowners have less then 10% equity, where's the growth? The growth is in the other end of the debt bubble; defaults, distressed mortgages, reduced equity, and paying interest for the privilege. NZ inc. the last bastion of the property ponzi.
@ BigDaddy | 02 Nov 11, 8:41am "There is one big difference between this market turmoil and the '87 crash and its aftermath said Olly Newland. Back then the Lange/Douglas, Labour Government...."
BigDaddy, back then I remembered my dad bought his 1st home (since we arrived in NZ), it was an average house in Wellington in Chartwell, he bought the house for $41,500 - his salary then was mid to late $20K and interest rate was 14% - Back then the house was about twice his annual salary - affordability wasn't a major issue then with high interest rate.
Well it's a different story now with the same house recently sold at $550K! At a guess it's 7-8 times the professional salary in WGTN ( say 70-80K/year)
Don't worry, everything will be fiiinnneee :o)
http://www.youtube.com/watch?feature=player_embedded&v=NaZQ2QjQu4w
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