NZ property report October 2017
Number of homes for sale slumps by nearly 50 per cent over past decade
Kiwis are redefining what makes a home
In October 2007, some 47,958 homes were available for sale in New Zealand on realestate.co.nz, the country’s largest property listing site.
Ten years on, the total numbers of homes listed has slumped to 24,307 (October 2017).
“The property market historically follows a cyclic trend, and this past decade has seen a steady increase in asking prices while the total stock for sale continues to fall,” says realestate.co.nz spokesperson, Vanessa Taylor.
“This is inspiring many Kiwis to think outside the square when it comes to letting go of the quarter acre dream, and recreating the notion of what makes a home,” she says.
“In October 2007, we were months away from entering the period of the global financial crisis.
“New Zealand got hit, albeit relatively lightly, but it was a period when lending was tight, house values dropped and new housing construction fell dramatically.
“The GFC hangover meant it took years for the property market to recover. Recently, as more Kiwis started to return to New Zealand permanently, along with the number of migrants from other countries, New Zealand found itself behind the eight ball when it came to sufficient housing numbers,” says Vanessa Taylor.
“It’s only in the last three years that the fall in available property for sale has been quite so significant,” she says.
In October 2014, total housing stock sat at 39,917, compared to 24,307 in October 2017, almost a 40 per cent fall.
“But it doesn’t mean that home ownership is out of reach.
“There is more creative thinking coming into our housing vernacular, such as the Tiny House movement, co-housing* with a central hub, as well as apartment and duplex options.
“The exciting thing is that as we move through to the next property cycle, we will have more options to suit our lifestyles, much like other large metropolitan cities across the world,” says Vanessa.
New property listings in October 2017 down 8.4 per cent
Real-time statistics from realestate.co.nz show that new property listings were down 8.4 per cent in October compared with the same month in 2016, with 10,778 homes newly listed for sale across the country.
“This is not a surprise. We have had a challenging winter and that dominated decisions, because people always want to show their homes in the best light.
“When there’s rain, wind and cool temperatures, prospective buyers tend not to venture out as much” says Vanessa.
“We also had an election with property as a significant focus, so it’s no surprise people would wait to see the outcomes.”
Every region in the North Island experienced a fall in new listings, with the exception of the Hawkes Bay which was up by 3.6 per cent compared to October 2016.
Auckland, which by its sheer size can impact the overall market nationally, experienced a 9.3 per cent fall in new listings. The 3,705 new listings were minimal in a market of this size.
In the South Island, Nelson registered the highest number of new listings for October compared to the same month in 2016, with 235 new listings.
Stock levels impacted by unique Auckland situation
While stock levels have been falling nationally over the past 10 years, in October 2017 they were up 3.9 per cent compared to the same month in 2016.
While new listings in Auckland fell 9.3 per cent compared to October 2016, total housing stock on the market increased by just over 17 per cent over the same period.
“Essentially this tells us that homes are not selling quickly in Auckland and this has had an overall impact on the national market,” says Vanessa Taylor.
This is also reflected in Auckland’s property asking price, which has been largely static over the past year (i.e. between zero and one 1% change in asking price each month). The average Auckland region asking price in October 2017 is $937,922.
“Auckland home owners are being realistic and nationally it’s still a sellers’ market, but less so in both the Auckland and Canterbury regions,” she says.
Theoretically, if no new listings came onto the market in Auckland and Canterbury and all existing listings were to be sold, there would be no houses for sale in both regions in 21 weeks. This is close to the long term average for both cities.
By contrast, if no new listings came onto the market in Wellington and all existing listings were sold, the capital city would have no houses for sale within nine weeks.
*Note: - Co-housing involves family homes being built in clusters of up to 35, around shared living spaces, gardens and communal facilities.
Glossary of terms
Being the only provider of real estate data in real time, realestate.co.nz offers valuable property market information not available from other sources.
• Average asking price gives an indication of current market sentiment. Statistically, asking prices tend to correlate closely with the sales prices recorded in future months when those properties are sold. As it looks at different data, average asking prices may differ from recorded sales data released at the same time.
• Inventory is a measure of how long it would take, theoretically, to sell the current stock
at current average rates of sale if no new properties were to be listed for sale. It provides a measure of the rate of turnover in the market.
• New listings are a record of all the new listings on realestate.co.nz for the relevant
calendar month. As realestate.co.nz reflects 97 per cent of all properties listed through registered
estate agents in New Zealand, this gives a representative view of the New Zealand property market.
• Demand: the increase or decrease in the number of views per listing in that region, taken over a rolling three-month time frame, compared to the same three-month time frame the previous year – including the current month.
• Seasonal adjustment is a method realestate.co.nz uses to better represent the core underlying trend of the property market in New Zealand. This is done using methodology from the New Zealand Institute of Economic Research.
• Truncated mean is the method realestate.co.nz uses to provide statistically relevant asking prices.
The top and bottom 10 per cent of listings in each area are removed before the average is
calculated, to prevent exceptional listings from providing false impressions.