Housing stock on market building

Thursday 4 January 2018

New listings slumped to the lowest level on record in December while the total amount of housing stock on the market is growing.

By Miriam Bell

Realestate.co.nz has just released its latest data and it shows that new listings were down by 6.2% to a record low of 7,133 in December 2017, as compared to 7,606 in December 2016.

December’s tally of new listings was also well down on November which saw 13,477 new listings - the highest number since November 2014.

New listings were down across the country with 13 of the 19 regions experiencing a drop.

Auckland was a significant contributor to this, with only 1,908 new houses listed which was down by 7.8% on December 2016’s 2,070 new listings.

But the biggest fall was in the Wairarapa, which was down by 32.9% to 98 year-on-year.

At the same time, the total amount of housing stock continues to build nationally: It was up by 9.3% when compared with December 2016.

Big year-on-year increases of housing stock was recorded in all the major centres in December.

Auckland’s housing stock was up by 26.1% on December 2016 to 8,497, while Wellington’s stock was up by 21% to 971 and Canterbury’s stock was up by 18.6% to 3,642.

However, average asking prices continue to climb despite increasing total stock numbers.

Nationally, the asking price climbed 3.8% to $660,798, as compared to November and the Central Otago/Lakes region matched this to record the country’s highest average asking price of $984,719.

Auckland saw growth of 2.7% in its average asking price, while Nelson & Bays, Marlborough, the West Coast, Southland and Wairarapa all saw significant increases in their average asking prices.

Realestate.co.nz spokesperson Vanessa Taylor says the drop in new listings was likely to have had some effect on the climbing asking prices.

But the data painted a particularly interesting picture of Auckland as it shows the region has moved from a sellers’ market to a buyers’ market for the first time since February 2011, she says.

“The average asking price is still increasing despite high levels of stock. Auckland saw new property valuations last year which may be leading vendors to expect more than the market wants to pay.

“While the average Auckland Council house valuation is now more than one million dollars, vendors and buyers need to remember this is an average, not necessarily a starting point.”

Meanwhile, ASB economists say the data shows the housing market remains volatile, with uncertainty continuing to impact on market activity.

It is also evidence that the Auckland market remains soft and that potential buyers remained cautious in the final month of December, they said.

“Increasing inventory levels combined with cautious buyers means we are likely to see the recent muted price growth in New Zealand’s largest city continue into 2018. 

“However, we believe that the Auckland housing market remains fundamentally undersupplied relative to population growth which will help to support Auckland house prices in the medium term.”

But the picture in Wellington is very different with inventory levels remaining very tight, they said.

“The fall in new listings in Wellington was coupled with a dip in overall inventory levels and weeks of inventory also fell back.

“As a result, we are likely to see ongoing pressure on both house prices and rents in Wellington as a result of the tight housing supply.”

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