Housing supply falls in New Zealand as prices also fall nationally

The number of new homes for sale in New Zealand is falling rapidly at the same time as prices are falling, according to the latest index figures.

Home prices fell by 3% nationally month on month in July to a median of $492,000 but are still 5.8% higher year on year, the data from the Real Estate Institute of New Zealand (REINZ) shows.

But prices increased month on month in Auckland with growth of 2%, taking the median price to $842,500. Prices in the city are up 13.9% year on year.

Overall there has been an 18% fall in properties available for sale and five regions have less than 12 weeks of supply, representing almost 70% of sales volumes.

Wellington has the fewest properties for sale with just seven weeks of supply, closely followed by Otago with 10 weeks of supply and Auckland, Waikato/Bay of Plenty and Hawke’s Bay with 12 weeks of supply.

The data also shows that sales in August were up 3% month on month but down 3% compared to August 2015. On a seasonally adjusted basis, the number of sales fell 0.2% from July to August and sales in Auckland were down 20% compared to August last year.

‘The underlying trends indicate that the struggle for stock is the single biggest factor driving market behaviour and price expectations across the country, as we await Spring listings,’ said Real Estate Institute of New Zealand (REINZ) spokesperson Bryan Thomson.

‘We have been highlighting the lack of inventory for some time, and it continues to be a major contributing factor in the volume of sales across all regions. This is particularly so in Auckland, where inventory levels are at historic lows,’ he added.

Two regions hit new record high median sale prices in August with Auckland reaching $842,500, while Nelson/Marlborough hit $430,000, up 12% year on year Central Otago Lakes recorded the largest percentage increase in median price compared to August 2015 at 41%, followed by Waikato/Bay of Plenty at 23% and Manawatu/Wanganui at 15%.

The number of days to sell has only improved by one day at the national level over the past 12 months, although the regions have seen some significant improvements. Six regions have seen a decrease of 20% or more in the number of days to sell. Auckland is the only region to see a lengthening of the number of days to sell over the past 12 months, up 1 day to 31 days.

Across New Zealand the total value of residential sales, including sections, was $4.481 billion in August, compared to $4.65 billion in August 2015 and $4.824 billion in July. For the 12 months ended August 2016 the total value of residential sales was $58.487 billion.