The NZ property market appears to continue to be in somewhat of a state of dormancy as judged from the new listings coming onto the market. This is also a reflection of somewhat subdued sales which whilst showing year-on-year growth are still lagging historical averages. Total sales for 2009 were just 69,629 up from the 2008 level of 56,128 but far from the mid 2000’s levels of 100,000.
January saw just 10,272 new listings coming onto the market; the first time in 4 years that the January figure has been lower than December. The start of the new year traditionally shows a strong lift in listings which seek to benefit from summer activity in the market. The 2010 year started with a 2% decline in new listings. However despite this signal of lower listings the trend is not as might have been expected towards a strong sellers market. The level of inventory of unsold homes on the market rose significantly in January to 40 weeks from the 34 weeks in December, this measure reflects the rate of sales which is running at a slower rate and therefore failing to clear inventory.
Supporting this position of a sluggish property market is the measure of asking price expectations which fell for the second month in a row from $412,319 in December to $405,040 in January, this is a sign of a market where sellers looking to transact in what is a quiet market are setting price expectation at realistic levels thereby ensuring that their property stands out in what is becoming a somewhat crowded market.
Asking Price
The vendor’s expectation of asking price for properties coming onto the market in January fell by 1.8% from November to $405.040.
This price represented a 1.8% fall in asking price when compared to the moving average of the past 3 months (Oct/Nov/Dec).
The asking price of new listings in January last year was $391,780 representing a 3.4% year on year increase.
New Listings
The number of new listings coming onto the market in January was just less than the total for December, despite the traditional strength of January as the summer season kicks into gear, this year a total of 10,272 as compared t0 10,349 in December.
Comparing January 2010 to January 2009 requires a note of caution as at that time the property market was suffering from the economic recession.
Inventory
The level of unsold houses on the market at the end of January totaled 52,817.This represented the equivalent of 40.1 weeks – this represents over 9 months worth of stock.
This rise in inventory whilst new listings appear to be so scarce brings into clear focus the sluggish level of sales over the final quarter of 2009.
Regional Summary – Asking price expectation
The overall trend of property price expectations as established by the listing price of properties coming onto the market in January was of falling prices. The national truncated mean asking price fell 1.8% from the month of December and 1.8% as compared to the recent 3 month average.
Of the 19 regions only 2 saw asking price rise – Wairarapa and Central Otago Lakes. The majority of the remainder posted falls of less than 5%, however Central North Island, West Coast and Taranaki all posted falls of more than 5%. Auckland fell 2.5% in the month contributing to a 5% slide since the November level of $543,522.
Regional Summary – New listings
The level of new listings in January was a modest 3% over the same month last year. This is significant as last year the scale of the economic recession was weighing very heavily on the property market.
Across the country the picture was varied with the main 3 centers posting year on year growth in listings, with Wellington showing a 12% increase.
Only two regions saw new listing lower than a year ago – Coromandel down 29% and Manawatu / Wanganui down 12%.
Significant increases over last year were seen in 7 regions – all posting 20% or more increase with the Hawkes Bay leading with a 58% increase.
Regional Summary – Inventory
The steep rise in inventory on a national basis in January was reflected across the majority of the 19 regions which in the main are clearly indicating a buyer’s market.
The only three regions which are seeing a level of inventory of unsold houses below long term averages were Auckland which now has 30 weeks of stock, The Hawkes Bay with 32 and Wellington with just 18 weeks. All of these regions inventory levels are over 30% down on the same period last year.
The areas of the country where inventory is significantly above long term averages were Northland (160 weeks), Central North Island (115 weeks), Taranaki (29 weeks) and Marlborough (74 weeks).
Lifestyle Property
Lifestyle listings in January slumped from 995 in December to 869. Whilst this total represented a 12% increase as compared to January 2009, based on longer term historical data the expectation would have been to see a rise from December. The truncated mean asking price for lifestyle properties in January was $558,947 representing a fall of 9% as compared to December. Set against January 2009 the asking price was up 5%, but down 6% as against the recent 3month average.
The majority of regions showed declines in new listings with the exception of Coromandel, Canterbury and the West Coast all of which showed year on year increases of over 50%.
Apartments
As with the total and other sectors, the apartment market failed to spark into life in the new year. A total of 432 apartments were listed as compared to480 in December and 352 last January. This 10% month on month decline was largely a function of the rest of NZ as Auckland witnessed a 5% increase in listings with 251 being added to the market.
The truncated mean asking price fell 1% from the prior 3 month average. At $367,289 the asking price of January was 10% below the price a year ago and a fall of 3% as compared to December. These falls were reflected in the same scale within the Auckland market.
The full report can be downloaded here (1.2MB pdf document). Additionally the raw data is accessible here as an Excel spreadsheet enabling anyone to analyse the raw data and establish any trends or observations. Usage rights are governed by attribution to the source of the data being Realestate.co.nz. The next NZ Property Report for February 2010 will be published on this website on Monday 1st March at 10am.
“The only three regions which are seeing a level of inventory of unsold houses below long term averages were Auckland which now has 30 weeks of stock, The Hawkes Bay with 32 and Wellington with just 18 weeks. All of these regions inventory levels are over 30% down on the same period last year.”
The inner city suburbs of Auckland seem to have had an excellent final quarter with median prices well up and to break it down to a more localised level I have just completed the 2009 Market Reports for Pt Chevalier and Westmere which can be viewed via the following links:
Pt Chevalier Market Report
Westmere Market Report
In the Pt Chevalier area stock of homes on the market as at mid January 2010 was less than half what it was in mid January 2009. We are very busy conducting appraisals and have many new listings starting over the next two weeks and expect to see these sell quickly.
Ross
Thanks for sharing that local perspective. It is often said but not always understood that property is a very localised market with unique circumstances in each mini-area. Your data certainly supports this situation for an area which amounts to barely 1,000 homes ??
Approx 2,500 in Pt Chevalier and 1,300 in Westmere so 3,800 total and from what I hear a similar performance in Grey Lynn, Ponsonby, Mt Albert, Sandringham, Balmoral, Mt Eden, Remuera, Royal Oak, Mt Albert and Onehunga.
Have you considered adding any similar information on asking prices/”inventory”/etc for rents? I realise you can get rent data easily enough, but available inventory would be interesting.
Rental research – IanC this link below may help but as to current inventory levels there doesn’t appear to be any tracking of this.
http://www.crockers.co.nz/services/research/prices.html
Ross
Thanks for pointing Ian in the direct of Crockers. As to the issue of inventory of rental listings. I have looked at the data and have hesitated producing such a report as the inventory levels are so volatile as a consequence of the speed of tenancy take up. A rental property comes onto the market and is often snapped up in days. Therefore doing a monthly inventory level is meaningless.
A weekly or daily moving average may be the metric with value. Certainly number of new listings is a valuable guide. I will see if we can pull together a meaningful report.
Thanks for the suggestion IanC.
Thanks Ross for the link.
And thanks Alistair – I hadn’t thought about the volatility but if you can find a meaningful stat that would be great.
The huge volume of rental activity and the speed at which they rent would indeed make it difficult to provide monthly data. This site http://www.minhousing.govt.nz/market-rent allows you to look up how many rental agreements/bonds were processed in any 6 month period.