Could be a cool summer

What a difference a few weeks makes. Just a few weeks ago I was talking about how the LVR restrictions had clearly taken some heat out of the market. Evidence for that was weak buyer demand and listings data that we collect and report on weekly.

Remember, we should be right in the midst of peak season for property market activity with listings climbing and sales activity strong. That was rattled by the Reserve Bank’s July announcement of new lending limits.

At the time the announcement came we would normally just be seeing activity beginning to ramp up in anticipation of spring. And indeed both buyer demand and new listings surged for a couple of weeks after the announcement.

Once that initial surge passed though, the weekly number of new listings in Auckland was barely above midwinter levels. For the rest of the country outside Auckland new listings JONNO INGERSON, DIRECTOR OF RESEARCH, CORELOGIC were above midwinter levels but much lower than they normally would be at that time of year.

Buyer demand was hit even harder in Auckland with weekly activity lower than midwinter, suggesting far fewer people are looking to purchase property. Like the listings activity, buyer demand outside Auckland was also seasonally very weak.

It looked to me that the usual spring lift was not going to happen, and my pick at the time was that people may well sit things out until well into the New Year after watching the dust settle.

Then all of a sudden new listings surged dramatically, especially outside Auckland. Any sign of seasonal weakness evaporated. Auckland’s lift wasn’t quite so dramatic with new listings still lower than the past two years, but the increase on the previous few weeks was nonetheless unexpected.

Likewise in mid- October buyer demand suddenly spiked, both in Auckland and across the rest of the country.

In the week before Labour Weekend it dropped back again, and with the short week following, it now means we won’t know if that was a short- term spike or the start of an upward trend for a couple more weeks.

Another obvious sign of market heat is price. There are the first signs that the rate of increase across the country may be slowing, and even hints that parts of Auckland may have dropped ever so slightly.

However, it’s still too early to call it a definite trend.

What all this tells me is that the market is very changeable, and the best we can do is watch the emerging data closely to see how people are responding.