Drop in price expectations lift NZ property market
There are signs of renewed confidence in the New Zealand real estate market with new listings growing and a slight drop in asking price expectations.
The November 2010 NZ Property Report says there was a significant and unseasonal lift in new listings, in some ways making up for the somewhat quieter first three months of spring.
The mean asking price for all new listings in November fell from the peak of $420,451 in October to $417,660. On a seasonally adjusted basis the fall was less than 1% indicating that the confidence in sellers demonstrated by the volume of new listings is also reflected in asking price, the report says. The current asking price continues to drift down below the peak of Oct 2007, currently off 2.7%.
A strong rise in new listings coming onto the market in November was higher than seasonally expected at 12,932 it was 7.3% up on a seasonally adjusted basis. Having seen slower levels of listings in the early spring season there was a sense of a catch-up, it adds.
On a moving annual basis the past 12 months have seen 140,214 new listings compared to 134,438 in the prior year an increase of 4.3%.
The level of unsold houses on the market at the end of November rose again to 54,365 from 52,043 in October. This represented the equivalent of 53.2 weeks of equivalent sales, as assessed on a seasonally adjusted basis.
‘The key driver of this rising inventory is more a reflection of somewhat lacklustre sales than excessive new listings. The absolute level though at over a year of equivalent sales will continue to impact the market and maintain the buyers market perspective,’ the report points out.
The national asking price expectation remained steady with just a small fall from the previous month and a small increase over the recent three-month average, the regional analysis shows some significant variances.
Amongst the 19 regions almost half showed a rise whilst the remained showed a fall. The three east coast regions of Gisborne, Hawkes Bay and Wairarapa all saw significant increases of more than 5%. The single largest fall in asking price expectation was seen in the Coromandel region which when combined with the rise in new listings may well reflect some significant re-pricing of existing listings which may be required to clear the inventory which now amounts to 262 weeks of equivalent sales. All three of the major metro regions showed steady increases in asking price expectation.
The property market as judged from the perspective of the number of new listings coming onto the market from around the country, shows all the indications of a seller’s market as new listing numbers were well down on the prior year.
Some regions in particular are showing wild variations in new listings. The Central North Island for example had 208 new listings in October up 42% on prior year, whereas in November just 135 new listings came onto the market down 50% on prior year. Equally the Waikato went from listings in October down 25% to this month 890 new listings, up 6%.
The Coromandel region already challenged by a very high level of inventory saw a total of 349 new listings in the month up 35% of the prior year.
‘Whereas the trend in new listings across the country would indicate a move to a seller’s market, the extent of the level of inventory of unsold houses continues to point very clearly to a buyer’s market,’ the report concludes.