Fewer new listings and stock sitting for longer

Last Friday, the Real Estate Institute of NZ  (REINZ) released its Monthly Property Report which showed some big increases in median prices in some areas around New Zealand.  Auckland was not one of them!

Auckland Results:

• Median house prices increased by 1.2% year-on-year from $850,000 to $860,000, compared to May 2018. This is the smallest increase in New Zealand, but is still the highest price the region has seen for 2019 so far.
• Number of properties for sale increased by 10.8% giving buyers 9,997 homes to browse and bringing total inventory to 28 weeks, up 7 weeks on the same time last year. However, new listings were down -3.7% so sellers are waiting to list their properties.
• Number of properties sold in May fell by -21.8% compared to May 2018 (from 2,462 to 1,925), however there was a 13.0% increase in the number of properties sold compared to April 2019.
• Median days to sell increased by 5 days from 40 to 45 when compared May 2018, and 4 days compared to April 2019, suggesting that people are taking their time to purchase.

Comments from Bindi Norwell,  CEO of the REINZ: 

“Agreements tend to be conditional, subject to the sale of another property. Banks are competing on interest rates but are still tough on lending conditions – particularly around transitions from one home to the next.

First home buyer demand remains consistent, but there has been a 30% increase in the Franklin region in the last twelve months, indicating that first home buyers are looking further afield from Auckland City.

There has been an estimated 30% decline in investors with new regulation and compliance being a contributing factor, especially for the ‘Mum and Dad’ investors.

Auckland’s decline in the number of properties sold is a trend we’ve been seeing for a few months now, with likely causes including the fall in new listings, the foreign buyer ban, and investors failing to add to their property portfolios with the ongoing changes in legislation.”

“Anecdotally, with more stock sitting around for longer, people will be looking to whether they need to be more negotiable on price, particularly if they are selling and buying in the same market” concludes Norwell.