The property market continues to show a continued tightness as highlighted in the April NZ Property Report with fewer new listings coming onto the market in the past month.
Just 9,993 listings were added to the website in the month of May down 5% as compared to April and down 29% as compared to May 2008. This steady decline of listings witnessed since February is resulting in inventory levels declining as the recent uplift in sales is significantly eating into available stock of properties on the market – a scenario echoed by most real estate agents around the country.
The resultant inventory of available listings when represented by the number of weeks of sales is currently sitting at 35 weeks (just over 8 months). This is down on both the March and April inventory levels of 52 and 42 respectively; and now represents a level below the average of the past two and half years at 38 weeks.
This new metric of inventory as expressed as the number of weeks of sales has been introduced to the report this month to bring perspective to the number of listings coming onto the market. Over the past two and half years the levels of inventory on the market has varied between lows of 20 weeks in the first half of 2007 right up to a peak in February of this year of 57 weeks. This latter figure very much influenced by the very low rate of property sales through the Nov / Dec / Jan period.
In terms of the asking price expectation of vendors of newly listed properties; the May truncated mean figure of $401,196 represents a fall of 1.2% from the April asking price expectation of $405,936.
Further it represents a fall of 1.7% as compared to an average of the prior 3 months (Jan/Feb/Mar).
The asking price in May 2008 was $414,539 which represents a 3.2% year-on-year fall in asking price.
The trend highlighted in the prior month’s report of a significant fall in listings pointing to a turning point in the market continues to be the view of the market in May.
As compared to the April level of 10,453 new listings, May saw even less listings even allowing for the traditional winter slow down of new listings just 9,993 new listings were added in the month.
Comparing seasonal movements over the past 2 years – May as compared to April; this year represented a fall of 4.6%. The same period for 2008 showed a fall of 11%, and in 2007 a rise of 5%.
This fall in new listings has led to the available stock of properties on the market falling to an inventory level of just 35 weeks, this compares to an April level of 42 weeks and a level of 45 weeks recorded in May 2008.
This level of 35 weeks compares to an average inventory over the past two and a half years of 38 weeks, during which time the level has moved within a range with a low of 20 weeks and a peak of 52 weeks.
Measured against the prior 3 months average amongst the 19 regions across the country, 7 reported price declines with 7 reporting price increases – the balance of 5 regions showed little appreciable change.
The highest price growth was seen in the Wairarapa with a 10% increase to $286,898; this actually puts the region’s asking price back to December levels following low asking prices in recent months. Biggest fall in asking price was seen in the Coromandel with 7.4% decline, this region also saw a rise in new listings. Potentially more realistic pricing of new listings may be contributing to this fall as vendors try and compete with a large inventory of homes for sale.
Only 2 regions showed an increase in new listings as compared to 13 regions showing falls in listings of more than 20% as compared to May 2008.
Marlborough, Southland and Gisborne all have seen new listings for the month of May fall by around 50% as compared to a year ago.
In overall terms the comparison against the same month last year is beginning to show some slowing of the major variances seen in the April report primarily as the prior period begins to reflect the changed sentiment seen in 2008 when sales had consistently fallen for over 4 months and vendors began to show hesitancy in adding their property to an already overcrowded marketplace.
The overall inventory has fallen for 3 straight months since the peak in February of this year with 57 weeks of inventory base on the rate of sale – a total of 62,522 property listings. In May the inventory of property listing totaled 56,114 which at the current rate of sale equates to just 35 weeks of inventory.
Across the country the inventory levels vary widely with the Coromandel region highest with the equivalent of 182 weeks (over 3 years of listings). Equally Northland, Central Otago Lakes and West Coast have over 100 weeks (2 years).
At the other extreme the areas with the lowest levels of inventory are Wellington with 16 weeks, Taranaki – 20 weeks, with Nelson and Otago with 23 weeks apiece.
Areas representing the tightest market in respect of current inventory as compared to long term averages would be Nelson, Wellington and Canterbury. Equally those areas with a proportionally high level of inventory would include Southland, West Coast, Gisborne and Northland.
New listings for lifestyle properties totaled 914 in May as compared to 906 in April. As measured against May 2008 the level of listings is down 15%.
The asking price for lifestyle properties in May was $577,501 this represents a 0.8% fall as compared to April and a 4% fall as compared to the most recent 3 month average.
Listings for apartments shows a 17% increase as compared to April with 473 new listings in May as compared to 405 in April. As measured against May last year shows a 25% fall. A total of 304 new listings of apartments in Auckland came onto the market in May representing a 22% increase as compared to April and a 16% fall as compared to May 2008.
The asking price for apartments in May was $396,363 representing a 6% rise from April. As compared to the prior 3 month average the May asking price shows a marginal increase of just 0.5%. The asking price for Auckland apartments in May was $352,620 this was a 12% increase as compared to April which itself was a surprisingly low asking price level. When compared to the most recent 3 month average May showed a 4.8% increase.
The full report can be downloaded here (1MB pdf document). The next NZ Property Report will be published on Wednesday 1st July at 10am.