‘Perfect storm’ hits property

A ‘‘perfect storm’’ of market conditions led to a record drop in the number of properties listed for sale last month, listings website Realestate.co.nz says.

The website said the number of new listings across the country fell 17.5 per cent in July compared to the same time in 2016. Spokeswoman Vanessa Taylor said the extent of the fall was a surprise. She said the 7933 new listings was the lowest number for any July since her records began in 2007.

‘‘That’s a big jump down. I didn’t think it would be that tight,’’ she said. ‘‘At the same time, New Zealand’s average asking prices for homes fell by only 0.3 per cent compared with the prior month. It’s a situation which we will be watching closely.’’

It was a case of supply and demand, with tightening supply and decreasing demand meaning a stable price environment.

‘‘We’ve come off the back of four or five years of really hot activity and it happened in quite a condensed space. When you’ve got an area that’s a hive of activity and then it moves out, it really does slow. That’s what we are seeing here. It’s a perfect storm with the election coming up and the school holidays, those factors come in that stop people.’’

Taylor said 2016 had been an exceptionally strong year for the property market. The Auckland region in particular was at an interesting stage in the property cycle, she said, teetering on the edge of becoming a buyer’s market, for the first time since 2011.

Theoretically, if no new properties were to come on to the market from today, Auckland’s property stock would sell out in 23 weeks.

North Island regions with the greatest falls in new property listings in July compared to the previous year were Waikato, down 27 per cent, Bay of Plenty, down 26.3 per cent, and Taranaki, down 22.4 per cent. By comparison, new property listings in Auckland fell by 13.9 per cent. In the South Island, Central Otago/lakes new listings in July fell 32.4 per cent compared July 2016, while Otago listings dropped by 28.8 per cent.

While property asking prices nationally only fell by 0.3 per cent in July compared to the previous month, four regions bucked the trend, with lifts in asking prices of more than 5 per cent.

The Coromandel led the way with a 11.2 per cent lift in asking prices compared to the previous month, followed by Northland, 5.6 per cent, Marlborough (5.4 per cent) and Central North Island, 5.1 per cent. At the other end of the scale, the largest falls in asking price for July compared to June were in Otago (down 7.9 per cent) and the Wairarapa (down 7 per cent).

Taylor said the site had recorded a decrease in the number of properties listed for sale by auction. But she said vendors and agents were instead choosing to list them by negotiation or tender, rather than with a listed price.

‘‘It means that buyers who are not unconditional can look at tenders and negotiations. With auctions you have to be unconditional to purchase. It does sometimes block people out.‘‘