The reason for the lack of homes for sale throughout New Zealand is not due to the economic conditions, as revealed in the First National Real Estate residential market survey for August.
The survey indicated that 68% of respondents said that sellers were waiting for spring to list their homes and this was the major contributor to the notable lack of homes for sale over the past months. Another reason is the lack of suitable properties available once they sell.
“Good sales over the past months have severely depleted stock levels which then reduce the opportunities for buyers.”Empty nesters‟ downsizing find little to choose from so are reluctant to list” says Paul Coltart, from First National Guardian in Wellington.
Compared to this time last year, 60% of the First National Offices stated that they have experienced an increase in appraisals; however, home owners have still been reluctant to enter the market.
The supply of listings is not corresponding with the increase in demand the survey revealed. “It is a sellers‟ market with serious buyers making multiple offers on properties for sale. Market conditions have never been better with low interest rates set to continue into next year,” states Colleen Milne, general manager, First National.According to the survey, home buyers visiting open homes have increased by 62% on the same time last year. Peter Wilson, of First National Reid & Wilson, Timaru backs this; “It‟s a great time to sell as buyers are plentiful and strong demand is having an inflationary effect on sale price. We are seeing evidence of very good lifts in values over relatively short periods.
In the Auckland market, “there are multiple offers on many properties. When buyers find something they like, if they have a house to sell, they are missing out to cash buyers due to the lack of stock,” states Gary Atkins, of First National Waitakere.
“The pressure on finding a home for sale increases in spring due to school zoning closing early in the season. If people are out of zone and are desperate to get into a particular school, the rush will be on to make sure they‟re in the zone by the end of the year,” says Jon Simpson from First National Rutherford, Howick.
Brent Howie, First National Taupo states, “the situation was slightly different in the Taupo region with the problem being that, in some cases, properties were overpriced. People will buy if the price is right.”
The message is clear: now is the time to sell while it is still a sellers‟ market. Spring will bring with it a greater supply of houses for sale which will boost the competition between sellers. Responding to the demand now will provide greater opportunities for a quick sell at a premium price.
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.