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NZ real estate becomes sellers market, new reports suggests

The latest report from Real Estate New Zealand indicates that the Auckland market, which saw strong late summer property sales, has now as a consequence of these sales matched to the slow flow of new listings and seen inventory levels below the long term average. At the end of May the inventory of unsold houses on the market fell to 30 weeks as compared to the long term average of 34 weeks. The last time this level was seen was at the end of 2009.

It also shows that the asking price expectation of the new listings coming onto the market in May fell back from the peak seen in April. Historically there is always an adjustment seen at this time of year. The seasonally adjusted asking price fell 2% nationally and that was reflected right across the regions indicating that the market still senses no significant property price inflation as yet with new to the market vendors pricing to attract buyers who are still small in number across the regions.

The truncated mean asking price for all new listings in May fell significantly from $429,249 in April to $414,308 in May. On a seasonally adjusted basis the asking price fell just 2% in the month indicating a degree of uncertainty amongst sellers.

The overall trend of the past two years continues to show strength in asking price expectation, according to the report.

The level of new listings coming onto the market in May fell to 9,898. This represented a 16% year on year decline but a 1% seasonally adjusted rise from April. On a 12 month moving basis the number of new listings in the past year totals 127,843 as compared 144,375 for the same period a year ago, a fall of 12%.

The level of unsold houses on the market at the end of May continued to fall from prior months. May reported 48,352 down from 50,398 in April and 51,980 in March.

‘The recent relative strength of sales as seen in March and April has now stared to see a clearing of what has been a high level of unsold houses on the market over the past 18 months. Heading into Winter, a time of traditionally weaker listing will likely see this inventory level fall further in coming months,’ the report says.

After reaching a new peak of asking price in April the national asking price for new listings fell in May. This fall was reflected around the regions with 12 regions reporting falls and just seven showing any increase. ‘There is seasonal trend behind this which sees the asking prices for May fall significantly as compared to April, likely as a result of the market entering the winter period,’ it added.

There were five regions showing declines of more than 5% in asking price with both Wellington and Queenstown Lakes among them, both of these regions are also showing low levels of inventory. ‘This potentially points to a caution over the state of the market with no significant inflation expectation amongst vendors, new to the market,’ says the report.

Northland and Otago saw the lowest level of monthly listings for four years while the level of new listings in the Canterbury region continues to remain weak as a result of the earthquake.