3 November 2009

Spring has traditionally been a time where New Zealand’s property market sees a marked increase in activity with a surge in new property listings.  However, the anticipated boost in properties for sale did not materialise during October 2009.

In fact only 13,550 new listings came onto the market in October according to the monthly NZ Property Report (released by a leading NZ real estate website).  This is lower than the 16,751 new listings in October 2007 and 14,462 a year ago and reflects a market in transition.  In the twelve months to October there have been 133,956 new listings compared to 170,428 new listings in the prior 12 months spanning 2007/2008.

The market change in the past twelve months is also reflected in the year on year change in inventory levels.  A year ago inventory levels were at 46 weeks with levels now down to 26.2 weeks.

Asking prices in relation to new properties coming onto the market in October remained stable after a significant increase last month.  The average asking price of new properties coming onto the market in October was NZD$418,759 which represents a 3.0 percent increase on the same month a year ago.

These statistics paint a picture of a stable property market re-emerging in New Zealand, on the basis of real value supply and demand rather than the highly speculative market seen in recent years.  This stabilisation is apparent from minimal movement in price-expectation and the low volume of property coming onto the market, with buyers holding onto properties rather than speculating.

The distressed element has left the market place with confidence building as New Zealand’s property market returns to what would be considered a “normal” level of market growth.

We are seeing renewed confidence from builders and developers showing through with a recent increase in building consents.  Building consent numbers act as a gauge as to the level of building activity and Statistics New Zealand’s building consent data showed a 23 percent rise in housing consents since May.

This increased building activity should go some way to relieving New Zealand’s property supply shortage which leading economists have warned of in recent times.  As always, properties in central locations and good areas continue to be highly sought-after and maintain strong values.

Ref: NZ Property Report, NZ Herald