New Zealand property market suffering from lack of supply

A lack of supply is pushing up the prices of homes in New Zealand with the mean asking prices rising to record levels in some regions. Even although the number of listings increased in December 2012 and January 2013 they are still down 2% on a year ago and the flow is not enough to meet buyer demand in the main cities, according to the latest data from realestate.co.nz.

Last month mean asking prices in New Zealand reached $443,734 and two regions reached record highs, Wellington rose to $453,220, and Central Otago/Lakes rose to $642,251. Listings in Auckland were down 4.2% year on year in February, while sales in January rose 26.7% on last year.

The seasonally adjusted truncated mean asking price for listings in February rose by 1% to $443,734 which represents a 4% year on year growth in the asking price as compared to February last year. The highest year on year growth was seen in Central Otago/Lakes region, rising 21% to a record high of $642,251, the highest regional listing price ever recorded in New Zealand.

As forecasted the level of new listings coming onto the market in February increased substantially, with 13,145 listings in the month an increase of 49%. On a 12 month moving average basis a total of 132,236 new listings have come onto the market since February 2012 as compared to 127,054 in the prior 12 month period, this represents a rise of 4%.

Overall, the report says that the market remains firmly a seller’s market with 13 of the 19 regions showing inventory levels that are well below long term averages. The national (seasonally adjusted) truncated mean asking price expectation among sellers rose by 0.7% in February to a new high of $443,734. The main centres, Wellington rose 4.6% to a new record high asking price of $453,220 while prices in Auckland, and Canterbury remained stable in February. Auckland sellers remained confident with an asking price of $603,781, up 9% on last year, and Canterbury rose 0.7% to $405,436, up 7.6% on last year.

In total 13 regions reported asking price increases, with seven of these regions seeing rises greater than 5%. The most significant rises were seen in Central Otago/Lakes, Taranaki, and Coromandel with Central Otago/Lakes showing the largest increase, up 16.4% to a record high of $642,251. A new record high asking price was also seen in Wellington, rising by 4.6% to $453,220. Of the six regions witnessing asking price falls on a seasonally adjusted basis there was just one that reported a fall of greater than 5% with Otago falling by 7.2% to $278,240.

Quote from PropertyCommunity.com : “The average price of homes sold in Auckland, New Zealand increased by 7.7% in 2012 as last month saw another period of strong sales for the residential property market.”

Following the seasonal listing trend, the report says there are likely to be strong levels of new listings coming onto the market in March. The main cities continue to suffer from low levels of listings as shown in Auckland where listings were down 4.2% year on year in February, while sales in January rose 26.7% on last year.

Market sentiment continues to favour sellers in 13 regions, with the greatest strain being felt in nine regions including the main metro areas of Auckland, Wellington, and Canterbury – these remain under pressure from low listings as measured against sales activity.