Property

Dire shortage of properties for sale

The total number of properties for sale across the country dropped by 33.3% last month. The second lowest level of inventory ever, REINZ data shows.

Wednesday, July 14th 2021

The lowest was in December 2020 with 12,932 homes for sale.

Just 13,861 houses were on the market last month, down from 20,772 in June 2020 and 6,911 fewer properties compared to a year ago.

The low numbers of houses coming to the market is one of the reasons house prices are still soaring. Independent economist Tony Alexander says FOMO (fear of missing out) is also returning to the market.

His surveys of real estate agents shows FOMO fell from levels above 80% between the end of August and the end of February to 49% at the end of April.

But the proportion rose to 51% in May and now 60% just one week ago.

For the third month in a row, only one region had a rise in inventory levels – Gisborne with a 30.8% increase from the same time last year – from 65 to 85 properties, 20 additional houses.

Regions with the biggest percentage drop in total inventory levels were Nelson -57.9% (from 411 to 173 – 238 fewer properties), Canterbury -48.5% (from 2,773 to 1,428 – 1,345 fewer houses), Northland -47.7% (from 1,092 to 571 – 521 fewer properties) and Bay of Plenty -47.5% (from 1,382 to 726 – 656 fewer houses).

Number of days to sell

In June the number of days to sell a property dropped 15 days (from 46 to 31) compared to June last year – the lowest for a June month in five years.

Properties in Southland are taking just 25 days to sell – the fastest properties have sold in a June month since 2007.

On the West Coast houses are selling 61 days faster than in June last year. At 35 days, it was the fastest that homes have sold in a June month since 2005.

For the second month in a row it took 41 days in Gisborne to sell a house – the highest of any region and the only region with a median sell timeframe of more than 40 days.

In Auckland the median number of days to sell is less than 30 – the first time this has happened in a June month since records began. 

Records tumble for auction sales

More than a quarter of all properties across the country for sale last month were auctioned, up to 26.9% from 10.7% in June last year.

This is the highest percentage of auctions for a June month since records began, indicating auction rooms are still not showing the usual signs of a winter slowdown.

Auckland, which has the highest number of houses for sale, naturally had the highest percentage of auctions with 41.9% (1,160) of properties selling under the hammer, up from 20.9% (448) at the same time last year. 

Bay of Plenty came in behind Auckland with 37.8% (164) properties sold by auction last month, up from 12.4% in June last year (55 properties). This was the highest percentage of auctions in a June month since REINZ records began in 2005.

Gisborne was close behind with 34.1% (15) properties going to new buyers at auction – down from 46.3% (25) in June last year.

House sales hit June month record

While the actual number of properties on the market for sale fell, the number of houses sold in June rose 6.2% when compared to the same time last year (from 6,913 to 7,345) – the highest for a June month in five years.

In Auckland, the number of properties sold in June increased by 29% year-on-year (from 2,144 to 2,766) – the highest for the month of June in 15 years.

But for New Zealand, excluding Auckland, the number of properties sold dropped by 4% when compared to the same time last year (from 4,769 to 4,579) – the lowest for a June month in two years.

In June, six regions had annual increases in sales volumes. In addition to Auckland, regions with increases were:

• Northland: +16.1% (from 174 to 202 – 28 more houses) – the highest for a June month in five years
• Taranaki: +9.6% (from 178 to 195 – 17 more houses) – the highest for a June month in five years
• Tasman: +7.8% (from 64 to 69 – 5 more houses) – the highest for a June month in three years
• Nelson: +2.7% (from 75 to 77 – 2 more houses)
• Canterbury: +7.8% (from 952 to 1,026 – 74 more houses) – the highest for a June month in 15 years.

REINZ chief executive Jen Baird says despite the reintroduction of the loan-to-value ratios (LVRs) just a few months ago and the Government’s tax moves to try and cool the property market, last month had the highest number of properties sold across the country for five years highlighting the underlying strength in the market.

“Reports from agents around the country are that there are still good numbers of attendees at auctions and open homes; and that both first time buyers and investors are still relatively active in the market.

“Again, much of the national growth has been driven by Auckland, but the market hasn’t seen the full winter slow down normally expected,” she says.

Baird says sales volumes are anticipated to continue at a solid level for the next couple of months unless there are any significant changes in the underlying fundamentals.

Comments

On Tuesday, July 20th 2021 1:55 pm Winka said:

Now that interest rates are in the rising mode, the effect of this is going to see investors dump properties onto the market. Home-owners are simply going to have to ride-out the interest-rises as far as they can. This glut of houses is going to alleviate much of the housing shortage related to home ownership. Then, when we see the effects of the 27th of this month take effect, the panic-selling is going to occur. Remember, the effects of the WEF are going to ripple throughout the whole world, and that includes New Zealand. As readers will recall, I have warned of this in writing for some time now. A warning that even a doubting crown prosecutor publicly doubted when warned in writing just prior to the GFC circa 13 years ago. The message to this one is that it is going to affect us for a much longer time The clock is ticking.

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