The NZ February Property Report shows sales volume increased 25% on the year as of last month and 22% in the last three months ending in January. Experts say the surge in sales is leading to more listings coming onto the market as sellers sense an upswing in pricing power and attempt to take advantage of higher values; however, it remains to be seen whether buyers will respond with increased demand. The gains have been concentrated in main cities while provincial areas continue to experience low demand. Experts attribute this to lower supply in more populous regions, with Canterbury and Central North Island reporting record highs. For more on this continue reading the following article from Property Wire.
The property market across New Zealand has become more active in the past nine months and in January alone sales were up 25% on a year ago while the final three months of 2011 saw sales up 22%.
The February NZ Property Reports also shows that with this increasing demand the market as reflected from the supply side has been slow to respond, that is until February when listings were seen to come onto the market in a strong surge.
In absolute terms the level of new listings at 13,459 is up 18% on February last year and 14% up on a seasonally adjusted basis from January.
‘This new rush of listings comes with a higher price expectation of sellers, eager to capitalize on what they see as a strong property market, the test will come as to whether these price expectations result in higher selling prices or if the level of buyer demand is prepared to meet these expectations,’ said director Alistair Helm.
‘As has been noted before, this pressure in the market caused by a shortage of listing is very focused in the main cities with provincial regions still not witnessing anything like the level of buyer demand or activity as witnessed in the cities,’ he explained.
‘This new surge of listings appears in the main to be easing some of the pressure as measured by inventory levels with easing in those areas of the country feeling the shortage most significantly in recent months providing some comfort for those buyers who are eagerly waiting for the right house to come to market,’ he added.
The seasonally adjusted truncated mean asking price of $426,575 for all new listings in February rose by 2.1% from January. This is a new record level for asking price up from the prior peak of $425,936 reached in October last year.
The level of unsold houses on the market at the end of February, 47,058, was up marginally as compared to January at 46,976, as measured on a seasonally adjusted basis. This total includes houses, apartments and lifestyle properties on the market.
The national, seasonally adjusted, truncated mean asking price expectation among sellers rose significantly to a new high of $426,575 in February.
Following the new record high for the national figure of asking price, both Canterbury and the Central North Island posted record highs. In the case of the Central North Island this is the highest asking price since October 2008, for Canterbury the pressure of listings shortages continues to put pressure on asking price.
Around the rest of the country 11 regions showed rises with Nelson the largest rise of 15.3% as compared to prior month on a seasonally adjusted basis. A total of eight regions reported seasonally adjusted falls with the West Coast and Taranaki posting large falls of 8.4% and 7.3% respectively.
As has been seen in recent months the main three metro centres of Auckland, Wellington and Canterbury reported continuing rises in asking price.
‘The change which has been witnessed over the past month has been to a more balanced market in many regions. As judged by the relative inventory to long term average, seven regions are identified as being sellers markets with just four being buyers markets, leaving the remaining eight as balanced markets favouring neither one party over the other,’ said Helm.
The most extreme market pressure continues to be felt in the Canterbury and Auckland markets, but also in the Waikato and the West Coast, all of which are seeing levels of inventory when judged on rate of sale basis well below long term average.
A noticeable change in February was the fact that in all three major cities the actual inventory level in weeks of equivalent sales and physical inventory did rise thereby showing that the market is responding the demand and shortage of supply.
This article was republished with permission from Property Wire.