Strong market for vendors
Low levels of listings have seen house sales drop across the country.
The lastest data from the Real Estate Institute of New Zealand shows it’s good news for vendors but not such good news for buyers.
The low number of new listings in July has meant that the number of houses sold in New Zealand during September decreased by -3 per cent year-on-year. This was the lowest level number of properties sold since January, according to the latest figures.
The number of properties sold across the country fell from 5674 in September 2017 to 5506 in September this year – 168 fewer properties. This is the lowest for the month of September since September 2011.
In Manawatu¯ /Whanganui the decrease in listings was 19.6 per cent from 916 to 737, a total of – 179 fewer properties. The flow-on effect of this decrease in listings was a considerable drop in house sales. Only 103 houses were sold during September, well down on the August figure of 144 houses. This is also down on the 126 houses sold in September last year.
REINZ spokesman for Manawatu¯ Andy Stewart says the critical shortage of available listings throughout Manawatu¯ is having an effect on the market by reducing the number of sales recorded in both Palmerston North and Feilding.
‘‘The lack of listings and high buyer demand are clear indicators of a strong sellers’ market. Prices will continue to increase and/or maintain the current level.’’
Stewart says there is no evidence that this is likely to change in the near future.
Of the 103 sales, Stewart says only 17 (16.5 per cent) were under $300,000, and a total of 67 (65 per cent) were under $400,000.
‘‘This continues to indicate that in comparison to other areas around New Zealand, our city still has a number of affordable homes available although prices are on the rise.’’
Stewart reports there is now a lesser number of sales occurring in the under $400,000 price range. There were 18 sales recorded between $400,000 and $500,000 (17 per cent) and 35 sales above $500,000 (34 per cent), of these, two sales was in excess of $1 million.
In Feilding there were 19 house sales recorded in September. This is a decrease on the 32 sales in August and is also down on the 26 sales recorded in September 2017.
However, the good news for vendors is that the median sale price increased to the highest ever recorded at $465,000, which exceeds the median price recorded in Palmerston North ($402,050) by $62,950.
Available listings in Feilding remain at a critical level with between 30 and 35 listings available within the town.
REINZ chief executive Bindi Norwell says: ‘‘Traditionally there is a lag of about six weeks between significant movements in listings and sales results. With July’s listings down by 5.4 per cent year-on-year and an all-time low level of listings in seven regions, it’s little wonder that September’s sales volumes were so low. There simply weren’t as many properties for sale resulting in a very quiet start to spring.
‘‘However, with August and September’s listing numbers up 0.1 per cent and 11.7 per cent respectively, it is expected that October and November’s sales volumes will be much stronger – particularly as people want to sell ahead of Christmas,’’ says Norwell.
Looking at the national picture, median house prices across New Zealand increased 5.9 per cent yearon-year from $525,000 in September 2017 to $556,000 in September 2018.
‘‘There are now seven regions across New Zealand that have median prices in excess of the half a milliondollar mark with Northland the newest region to go over this level.
‘‘Additionally, there are already three regions that have exceeded the $600,000 median mark and with Nelson’s median sitting at $592,000 it may not be too far away until we have a fourth region edging over the $600,000 mark,’’ says Norwell.
‘‘With our population growth and demand for properties continuing to exceed the supply of housing stock, prices are likely to continue increasing in the short to medium term.
‘‘In fact, new research issued by AUT earlier this week suggested that at our current rate of supply we won’t reach demand until the mid-to-late 2020s. This means that price pressure could well be an issue for some time – particularly in our more densely populated cities,’’ says Norwell.