Asking prices for residential property in New Zealand increased 2.7% in August as the real estate market began showing signs of reviving.
The truncated mean asking price for all new listings rose significantly from $403,474 in July to $415,0784 last month, indicating that there is an emerging confidence amongst sellers of stronger prices, according to the latest NZ property report.
It says that the sings are more positive than they have been seen for a number of years and it is gearing up for a much stronger spring season.
‘There is a seasonal trend that sees asking price rise in the August month each year, this year that seasonal rise is somewhat more significant,’ it adds.
The level of new listings coming onto the market in August rose for the first time since March. 10,120 new listings came onto the market representing a 3% year on year increase and a more significant 9% rise on a seasonally adjusted basis.
On a 12 month moving total basis the number of new listings in the past year totals 124,544 as compared 144,893 for the same period a year ago, a fall of 14%.
The level of unsold houses on the market at the end of August continued to fall from prior months. At the end of there were 44,689 houses, apartments and lifestyle properties on the market down from 45,674 in July and down from 50,138 a year ago. This current level of inventory represents 36.7 weeks of equivalent sales.
‘The market is very firmly parked as a sellers market, with inventory levels at lows not seen since 2009. At that time, the low inventory was a result of a degree of a buy up of distressed properties being sold at attractive prices because of the global economic recession. This time around, property sales have been steadily rising whilst listing have been in relative short supply,’ it says.
It compares the situation now with six months ago. ‘Back in February the average number of property sales over the recent three months was 4,256. In July it had risen by 24% to 5,281. At the same time the number of properties on the market has fallen 15%,’ the report reveals.
‘Traditionally the month of September shows the start of the Spring season, this year we appear to have seen an earlier rush, potentially as a function of greater economic confidence matched to attractive interest rates or possibly a potential impact of the Rugby World Cup, it adds.
It also points out that the rise in asking price expectation is party explained by a seasonal uplift associated with increase in listing numbers. However, underlying this is a steady, albeit slow rise in the expected listings price for new properties coming onto the market. ‘This recent asking price expectation is still some 3% below the recent peak of asking price back in April, however the trend is certainly upwards,’ it adds.