Some 42% of people are confident about the economy in a year’s time but they are not prepared to spend right now, said BNZ chief economist Tony Alexander. Residential real estate was weak with few buyers and things clearly on hold until details of tax changes were revealed in the budget, Alexander explained.
The sentiment is backed up by the latest listings report from realestate.co.nz which shows that a sharp rise in new listings is keeping the real estate market in negative territory and very much in favour of buyers.
More than 14,000 new listings were added to the New Zealand property market in March, bringing the number of unsold homes to 55,623 and it will take more than a year to clear the available stock, says the report.
The company’s chief executive Alistair Helm said vendors needed to have more realistic expectations of what their property is worth in the current market and price it accordingly.
‘Sellers appear to be in denial as the asking price for new property listings in March rose and is now only 1% below the peak of the market back in October 2007. They need to be flexible on the prices they are asking in what is clearly a buyers’ market,’ he explained.
ASB economist Jane Turner said agreed that the rise in inventory has pushed the market back in favour of buyers and although the number of listings remains low historically, the number of sales is likely to be even weaker.
‘The rise in new listings remains muted, suggesting there is little sign yet of a rush to sell off investment properties in response to proposed tax changes,’ she added.
The inventory level of unsold houses, as measured by the number of weeks of sales necessary to clear the market, has gone beyond the one year mark, to 53 weeks during March, some 53% up on December, the report also shows.
But another report shows that property sales in Auckland have climbed to their highest level in almost two years, signalling an improvement in buyer confidence.
Figures from Barfoot & Thompson show house sales in March increased 4.6% compared with the previous months and have edged ahead of those for the same time last year.
Managing director Peter Thompson said an influx of people into Auckland, growing confidence in the economy and an Indian summer have all contributed to the rise.
And he said he disagrees with the feeling that asking prices are unrealistic. He believes that the market is evenly balanced and does not favour either buyers or sellers. ‘Our experience is that the majority of sellers are putting realistic values on their properties, while buyers are not solely intent on bargain hunting,’ he said.
