The statistics from this month’s report show clear signs of a more balanced property market – the balance being between buyers and sellers. The rise in new listings whilst unseasonal, could well point to an earlier in interest from vendors in getting property onto the market ready for spring. It is important though to highlight that the absolute levels of new listings remain relatively low when compared to historical data.
In the month a total of 10,773 new listings were added to the market, this compares with 9,561 in June. The comparable months a year ago saw 12,684 new listings in June and 11,200 in July last year. This represents a 13% increase in listings as compared to the prior month and a 4% decline as compared to July last year.
A noticeable rise in apartment listings combined with a lower asking price expectation could have a contributory factor in a slight weakness in the asking price expectation in the overall market which showed a 2% decline in July.
These statistics reflect the sentiment in the market as judged by real estate agents. This sentiment is best expressed by a summary of the market from Mike Elford, President of the Real Estate Institute of NZ (REINZ)
“The key issue affecting the property market over the past few months has been the inventory of new listings. Property owners have been sitting tight and have been reluctant to place their property on the market. More recently however as sales volumes have stabilised and prices have firmed the interest in listing properties in readiness for the spring period has grown which bodes well for the coming months”.
Asking Price
The vendor’s expectation of asking price for properties coming onto the market in July showed a decline of 1.5% from the prior month.
The truncated mean price for the 10,773 listings added in the month was $396,949. This represents a 1.6% fall in asking price when compared to the moving average of the past 3 months (Apr/May/Jun).
The asking price of new listings in July last year was $402,539 which represents a 1.4% year-on-year fall in asking price expectation.
New Listings
The number of new listings coming onto the market increased to 10,773, a rise of 1,212 (+13%) from June. This reverses what was a 4 month trend of declines in new listings from the summer peak in February when 12,164 listings were added to the market.
As compared to July last year when there was 11,200 new listings added to the market, this past month represents a fall of just 4%. The graph provides a view of the continued relatively low level of new listings despite the increase in the month.
Inventory
With the small rise in new listings matched to steady sales level the available inventory (measured in terms of “the number of weeks to clear all the stock of houses on the market) has remained steady at 32.1 weeks.
As can be seen from the graph this month’s level arrests what has been a steady decline in inventory levels from the peak back in February.
Regional Summary – Asking price expectations
Asking price expectation of vendors slipped across the regions in the month of July with 12 of the 19 regions showing asking price falls of greater than 1%. There were 3 regions – Central North Island, Otago Lakes district and the West Coast that showed asking price declines of over 5%. The overall decline nationally was 1.6% measured as compared to the prior 3 months.
The main centers of Auckland and Christchurch showed declines of around 3% whilst Wellington was a more modest 1% decline. The 3 regions showing asking price expectation rises of more than 5% – Gisborne, Marlborough and Southland are relatively small regions and as such can be subject to more volatility in price movements.
Regional Summary – listings
The national pick up in listings was reflected across the country in what could best be described as a more stable property market. Out of the 19 regions, 10 showed year on year listings movements of less than 10%.
There were 3 regions which reported significant rises in listings – Central Otago lakes, Central North Island and Marlborough – all reporting rises of over 20% from July last year.
Only one region the Coromandel reported a significant continued decline in new listings with a 35% year on year decline.
All of the 3 major regions showing relatively low levels of inventory saw no appreciable lift in listings year on year – Auckland was down 6%, although up 12% on prior month. Wellington was down 2%, although up 17% on prior month and Canterbury was down 2% and up 8% on prior month.
Regional Summary – inventory
With stronger level of new listings and stable prior quarter sales the inventory levels (measured in terms of “the number of weeks to clear all the stock of houses on the market) stablised in most regions.
The chart attempts to estimate the propensity of region to be experiencing a buyers or sellers market based on inventory as compared to historical averages.
In overall terms there is a sense of balance in the market between buyers and sellers with the majority of regions showing levels in line with long term averages. The key centers of Auckland, Wellington and Christchurch however still show continued signs of low inventory including Wellington which continues to hover at around just 15 weeks.
The regions of Coromandel and the West Coast continue to show signs of high inventory.
Lifestyle
New listings for lifestyle properties rose in the month of July from 812 in June to 967 in July (+19%) – the year on year variance showed a 17% increase.
The truncated mean asking price expectation from vendors of lifestyle properties in June was $535,602 an 8% decline over the preceding 3 month average and a 12% decline in the same month last year.
A region showing significant activity over the past month was the Otago Lakes district including Queenstown which saw 71 new listings – more than the total for the last quarter. The asking price expectation was down 45% on the prior 3months at $542,600, potentially more a function of the dearth of new listings in the past quarter, than an indication of the current asking price expectation.
Apartments
The apartment market shows renewed activity with a total of 733 new listings in July rising 54% from June and representing a 41% increase on July last year. The July total was the highest single month of new apartment listings since February 2008. Auckland which accounts for around two thirds of all apartments reported new listings of apartments totaling 541 in July up 80% on the prior month and a similar 80% increase on prior year.
The asking price of apartments nationally in July fell 9% from the prior quarter average to a new level of $365,431. As compared to July last year the current asking price shows a decline of 15%. In spite of the national fall, the asking price of apartments listed in Auckland showed only a small fall of just 1% as compared to the prior 3 month average.
The full report can be downloaded here (1MB pdf document).
The next NZ Property Report for August 2009 will be published on Tuesday 1st September at 10am.
Interesting to see that around 50% of the listing increase is from apartments and lifestyle properties.