Two-speed property market in NZ as provinces lag behind, report shows
The August 2010 NZ Property Report published by realestate.co.nz also shows that it is still a buyers market and that although August tends to show the first signs of the spring pick-up in activity in the property market, it is not happening this year.
New listings are below 10,000 and down nearly 11% on a seasonally adjusted basis. ‘This decline in listings would ordinarily signal a tightening of the market at this time of year, were it not for the existing high levels of inventory already on the market and the flow-on impact of slow sales,’ the report says.
These slow sales are resulting in inventory levels of unsold houses remaining above 46 weeks as compared to the long-term average of 38 weeks, reinforcing the view that the market still favours buyers over sellers.
Asking price expectations picked up slightly in August having fallen significantly in July. The truncated mean asking price for August was $403,423, down just 0.6% on the prior three month average and up 1.6% on August last year. ‘This would indicate stability in price expectation amongst sellers’ says the report. But the current asking price still lags 6% behind the peak of the market in October 2007.
The volume of new listings coming onto the market fell again in August with under 10,000 for the first time since June last year, the fifth consecutive month of decline. Over the 12 months to August 2010 a total of 144,893 new listings came onto the market. This compared with 134,165 in the prior period, an increase of 8.0%, on the same comparison property sales have not kept pace rising only 2.8%.
The level of unsold houses on the market at the end of July totalled 50,138 down 4.3% from July. This represented the equivalent of 46.1 weeks, as assessed on a seasonally adjusted basis. The inventory level did not fall as markedly due to slower property sales, the report points out.
Nationally the asking price expectation of the new listings in August showed very little change following the significant fall in July. Measured on a month-on-month basis or versus a three month average the variance is small. ‘This would indicate that sellers sense that no further adjustment is required to meet the market and thereby the expectation of buyers,’ it adds.
Across the country the trends are mixed with just five of the 19 regions showing rises in asking price expectations, all of which are below 5%. On the declining side there were some significant shifts with Central North Island down 21.5% and Wairarapa down 15.6%, both of these two regions are now sitting at a low point in asking prices stretching back to January 2007.
Around the country the predominant trend is fewer listings on a year on year basis. Some 10 of the 19 regions showed falls with a further four showing stable listings volumes. In four regions, Northland, Waikato, Coromandel and Wairarapa, the level of new listings in August were the lowest months on record stretching back to January 2007, indicating the state of the market in these provincial areas.
Despite the decline in new listings the inventory of unsold houses remains doggedly high. This is especially true of provincial areas more than metropolitan regions of the country. The three main centres are close too or actually in line with long term average levels of inventory thereby indicating that in these cities the market is well balanced.
Across the provincial areas of the country though the picture is very different as the swathe of green shows on the map indicating the higher levels of inventory as compared to long-term averages. The only provincial areas bucking this trend are Otago and Nelson.