Residential sale prices are experiencing increases, not only in Auckland and Canterbury, which had previously been driving the national increases, we now see ten regions across New Zealand reported asking price increases. Four of these regions were greater than 5% with the most significant in the Coromandel, Central North Island, Taranaki, West Coast and Nelson regions.
However inventory across the country remains low with only 30 weeks of inventory in September.
A First National Real Estate national survey reveals that vendors are not listing their properties because many cannot find a suitable property to buy. I have spoken to a number of buyers across the country that have continually been beaten in their purchase of a property, because of the multiple offers many properties are receiving.
There is always the exception to the rule – in Tauranga the days to sell are the highest in the country, Dargaville are listing multiple properties every month. Employment within the region is still a key focus on how house sales and pricing perform. However, buyers, investors and first home purchasers are keen to purchase a residential property. This is exacerbated with the outlook for interest rates looking promising, with no change in these rates expected until 2014. As low yields from investments continue more investors are looking at property investment as their best option.
Expectations among property investors in a recent survey revealed that property investors expect average rents to increase by 6% – 10% over the next five years, therefore most investors are looking to grow their investment portfolio; this is putting more pressure on the housing market. The leaky home issue in Auckland continues to be a pivotal factor in the number of houses for sale with reports of up to 15% being at risk. The lack of construction throughout the country also contributes to the lack of houses for sale. Furthermore, the high costs in construction and compliance; the difficulty in developers obtaining finance for their housing projects all adds to the current shortage in the number of houses for sale.
While the number of sales are higher than in 2010 and 2011 there is still a lack of activity since the global financial crisis. Buyers are being more careful and undertaking more research on their potential purchase, particularly, the first home buyers. If you are considering selling, now is the time to sell, as it is a sellers market.