Unusually high number of homes on the market

Wednesday, 3 July 2024

The number of homes for sale nationwide remains at higher than normal levels, and that is in line with the slower pace of the market, Realestate.co.nz says.

There were 31,745 homes around the country listed for sale in June, a 28.6% increase from 24,676 at the same time last year, the property website’s latest figures show.

Realestate.co.nz chief executive Sarah Wood said while that was a 2.6% decrease from May, the number of homes on the market has remained above 30,000 for five consecutive months.

“It is a high level of stock. At the peak of the market, the number of homes for sale fell to around 12,000 nationally, so it is quite an increase. We haven’t seen it at these levels since 2015.

“The increase is even more pronounced when looking at particular regions. Stock was up in most markets in June, but in Auckland it was up 34.8% annually (to 12,162), and in Wellington it was up 49.8% (to 1,773).”

Canterbury stock was up nearly 14.7% with new listings up 23%, just below the nationwide increase of 25.5% year-on-year during June. However, that was a return to normal after low listing levels last year, she said.

“Again, Wellington had a particularly big increase in new listings, up 50.3% annually. It looks like there’s lots of new properties coming on to the market, and they are not selling quickly so there’s a big build up of stock.”

At the same time, the average national asking price on the website had remained stable, fluctuating between $860,000 and $890,000 for the last 18 months, the figures showed.

In June it was $861,260, down 0.4% from $864,361 at the same time last year, but up 0.3% from $858,662 in May.

Wood said that was a year and a half of buyers and sellers facing some level of certainty around prices, which “is a silver lining in an uncertain economic environment”.

“The price stability is a reflection of a more normalised market, after the very busy market at play a couple of years ago.”

But there was greater variation in regional asking prices, with 11 of the 19 markets monitored recording annual decreases, and only five recording annual increases of more than 1%, the figures showed.

Central Otago Lakes District had the biggest price fall at 5.9% which left it with an average price of $1.41 million.

Of the main centres, prices in Auckland and Wellington were down 3.7% and 1.5% to an average of $1.04m and $818,352 respectively, while Canterbury prices were up 0.7% to $699,036.

In contrast, Southland prices rose the most, up 12.1% annually to $528,139 in June.

Wood said there was a lot happening in the market now, with high interest rates, new debt-to-income ratios and softer loan-to-value ratios coming in, and changes to investor tax policies.

Those changes could impact the market, she said.

“Anecdotally, real estate agents have reported a backlog of properties waiting to be listed until the new bright-line rules took effect this week, as more landlords struggle to sustain their rental properties with such high interest rates.”

New Zealanders typically did not like to buy and sell property in uncertain times, and many were likely to be waiting to see the impact of the new regulations, she said.

“But the high level of stock on the market means buyers have fantastic choice, and the slower pace of the market allows buyers and sellers to take their time, do their research and get advice.”

The high level of houses currently for sale has also been reported by several other property companies.

CoreLogic’s June Housing Chart Pack put the total stock nationwide lower at 21,784, but said it was a 15.8% increase on the same time last year and 27.6% higher than the five-year average.

Auckland real estate agency, Barfoot & Thompson, released its latest data on Tuesday, and it showed that at the end of June it had 5736 properties on its books, a 31.3% increase on the same time last year.

Barfoot & Thompson director Stephen Barfoot said a high number of new listings continued to hit the market, but prices remained constant, and the market was in recovery mode rather than going backward.

Earlier this year, the agency said there were 5382 homes on its books at the end of February, and that was the highest number of stock listed since April 2011.

At CBRE’s residential symposium last week, the company’s executive director Zoltan Moricz said stock on the Auckland market was getting high.

“It is now second only to the global financial crisis era level of around 12,000 to 15,000 properties.”