It is now clear that the property market is more buoyant. We have evidence of a flood of young buyers entering the market, investors re-entering the property market and prices are rising. Those purchasers hoping to hang out for prices to fall have thrown in the towel and faced the growing evidence that the property market is on the move again, finally, after a long hard winter.
The unusually low interest rates, with fresh cuts in home lending fixed rates is fuelling the property market with confidence that these interest rates will be maintained for many months ahead. Investors are back to choosing property because the prospective returns are more positive in a world of volatility.
New listings began to surge in May at 11,544 up 16% on a seasonal adjustment (realestate.co.nz). This is the highest seasonally adjusted total month of listings since July 2010. The stock of unsold inventory rose in May to 35.7 weeks, whereas a year ago this was 43.2 weeks.
The asking prices also hit another high in May up to $435,887 as sellers have responded to the previous lack of demand; this has resulted in multiple offers on properties and peak sales particularly in Auckland and Christchurch.
The rise in stock has led to a fast adjustment of provincial regions where the market was biased to the seller; this appears to be more balanced. The major regions showing movement in asking price expectations are Auckland 1.7% increase with a record asking price of $578,533 and Canterbury seasonally adjusted 0.5%
Confidence is creating the ensuing surge with sellers believing they can realise their asking price and buyers having the ability to find finance at achievable and sustainable levels.