New Zealand’s real estate market is flush with nearly a year’s worth of inventory, and sales are stagnant. In order to motivate reluctant buyers, sellers may need to lower expectations – a reversal of fortune for vendors in regions like Wellington. See the following article from Property Wire for more on this.
The number of new properties on the market in New Zealand surged in February but buyers are becoming more cagey, according to the latest monthly real estate reports to be published.
The number of unsold houses across the country is rising with listings up 47% from January to February, their highest level since April 2008, the monthly report from listings website realestate.co.nz shows.
But with sales volumes static, the number of unsold properties across the country has ballooned and at current sales levels the backlog would take 48 weeks to clear.
Realestate.co.nz chief executive Alistair Helm said February traditionally saw a jump in new listings, but the rise last month was the largest monthly increase since the online property portal was launched more than three years ago.
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More significantly, the expectation of sellers was not matched by sluggish sales volumes which remained static. As a result, the inventory level of unsold houses, as measured by the number of weeks of sales necessary to clear properties on the market, had jumped further to 48.2 weeks, said Helm. This compares with an inventory level of 34.3 weeks % in December, an increase of 40% in just two months.
‘Even those regions which had been a seller’s market for much of last year, defying the national average, are now experiencing a change. Wellington, in particular, which continues to lead the country with the smallest stock of unsold houses, is experiencing an inventory level of 29.2 weeks, a 94% increase in the last two months when inventory stood at only 16.5 weeks in December,’ Helm said.
According to the report, the stock of unsold houses in Auckland and Canterbury had inventory levels of 36 weeks. The regions with the highest inventory levels were Coromandel at 226 weeks, Northland at 163 weeks, and West Coast at 162 weeks.
A separate monthly survey from First National Group found that in its 70 offices staff have found that 44% of vendors had become more reasonable in their price expectations since Christmas with 20% reductions becoming more common
Areas where sellers were becoming more realistic about asking prices include Wellington, Invercargill, South Auckland, the central North Island, Northland, Alexandra and coastal holiday destinations.
But places where prices were still at pre-Christmas levels included Taranaki, Blenheim, central and northern Auckland, and parts of Christchurch.
‘With buyers so cagey at the moment, it is in a vendor’s best interest to price realistically or risk waiting many months to sell. Right now absolute lack of confidence is holding things back,’ said First National general manager John Stewart.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.