Slow Sales In New Zealand Housing Market Hurts Prices

A dearth of new listings in New Zealand should provide price relief for properties already on offer, but slow sales are keeping inventory levels elevated and spoiling what …

A dearth of new listings in New Zealand should provide price relief for properties already on offer, but slow sales are keeping inventory levels elevated and spoiling what should be a seller’s market. December was the slowest month on record for listings, while as many regions reported asking price increases as decreases. See the following article from Property Wire for more on this.

The real estate market in New Zealand saw a record low level of new listings coming onto the market and a slight drop in asking price expectation in December.

The latest report from Realestate.co.nz says the low number of new listings should have one benefit, they will ease the pressure on existing houses on offer, which are sometimes proving hard to sell.

‘The constant factor in the market is the scale of the inventory of unsold houses which in absolute number began to decline as somewhat stronger sales began to clear some of the inventory. When judged against the rate of sale of property, which continues to be weak, the inventory in number of weeks of sales continues to sit well above long term average, currently at 50 weeks,’ the report says.

Asking prices for all new listings coming onto the market in December fell slightly from $417,660 to $415,750. On a seasonally adjusted basis the asking price actually rose by 1.3%. Overall asking prices seem to be showing volatility especially with such low levels of listings coming onto the market. The current asking price continues to drift down
below the peak of Oct 2007, currently off by 3.1%.

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‘The traditional seasonal fall in December was as expected, but when coming off a slower level of preceding months the actual level of 8,924 hit a record low. No single month since Jan 2007 has seen a total of less than 9,000 per month, said chief executive Alistair Helm.

On a moving annual basis the past 12 months have seen 138,789 new listings compared to 135,416 in the prior year an increase of just 2.5%. The level of unsold houses on the market at the end of December fell to 53,077 from 54,365 in November. This represented the equivalent of 50.1 weeks of equivalent sales, as assessed on a seasonally adjusted basis. The inventory of unsold houses, whilst dipping slightly as a consequence of a strong November sales continues to sit well above the long term average of 40 weeks of equivalent sales.

Whilst the national asking price expectation remained steady with just a small fall from the previous month, the regional analysis shows some significant variances. Amongst the 19 regions almost half showed a rise whilst the remainer showed a fall.

Strong increases in asking prices were seen in the North Island with Auckland showing a significant 5.2% increase as compared to the recent three month average. The Hawkes Bay and Central North Island also showed strong increases, although in the latter region the volume of new listings was low. Price movements in asking prices across the South Island were less significant with the Nelson /Marlborough region showing increases of over 5%.

With the record low level of new listings in the month the sentiment of the market based on new properties fresh to the market would seem to show an inclination to a seller’s market. This however takes no account of existing inventory of unsold houses on the market.

In spite of the overall fall in new listings across the country, both the Coromandel and the Wairarapa both saw rises in new listings compared to December last year.

There were five regions that saw year on year falls of more than a third, Northland, Gisborne, Hawkes Bay, Marlborough and Central North Island. With the exception of the latter region all of the others still have a relatively high inventory of unsold houses on the market.

This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.

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