Sellers return to market but prices ‘lack direction’
The average asking prices for houses dipped slightly in March as the total number of houses on the market jumped to the highest in nine years, the Real Estate Institute has reported.
The average asking price fell 1.3% to $886,953 during the month after increasing about 1.2% in February, but remained up 2.9% over the year, general manager of marketing Vanessa Williams said.
“We have got a directionless market at the moment when it comes to prices,” Williams said.
The market was looking a “little bit more positive earlier in the year” after three months when asking prices ticked up.
But they had largely remained in a tight band between $860,000 and $890,000 over the past two years, she noted.
“While it's wavered 1% or 2% here and there, it’s really not shifted significantly; it’s been very, very flat.”
The number of new listings was up by almost 24% over the year, with 11,455 properties newly listed for sale in March.
New listings jumped by 30% in Auckland and Wellington when compared with March last year, but ticked up only 10% in Canterbury.
The total number of houses available for sale was now “back to levels not seen since 2015”, the institute said, standing at 33,245 at the end of the month, 13% more than a year ago.
Williams took that as a sign that sellers who might have been waiting for a stronger recovery in house prices had decided instead to “get on with their lives”.
“Seeing average prices fall from above $1m in 2022 was a bitter pill to swallow, but prices have now been stable for quite a period and I think people are saying ‘OK, this is the market now“.
Average asking prices slipped 0.9% in Auckland to $1,065,665 over the month and by the national average of 1.3% in Wellington where they fell to $855,056. But Canterbury bucked the trend with a 0.5% rise to $709,981. Asking prices are up by 4.7% over the year in Canterbury, meaning they have roughly kept pace with inflation.
Williams said Canterbury was a fascinating market as prices had risen at a more sustainable pace than in other parts of the country in the past.
“If people see there’s lots of houses on the market and lots of shoes outside the door, they make think ‘actually, maybe this is a good time to buy’, and maybe that’s what’s happening in Canterbury.”
Asking prices in Wellington are now flat over the year, but Williams said it was worth remembering that prices in the capital were relatively elevated a year ago.
The axe hanging and in some cases now falling over public sector jobs in Wellington meant there would be nervousness in the capital, Williams said.
But there was a real shortage of supply in the city also, with only 1819 properties for sale and that made for the possibility of a volatile local market, she said.
Williams said that, nationwide, it was good to see listings returning and the stock of houses for sale increasing.
Reserve Bank governor Adrian Orr voiced “real concern” in February over whether there were a sufficient number of dwellings being built to cope with the recent surge in immigration.
The IMF’s New Zealand mission chief, Evan Papageorgiou, warned last month that measures to boost the supply of housing were “urgently needed”.