Housing Supply Up in New Zealand

15/06/2017

According to realestate.co.nz data, the total number of homes for sale in New Zealand increased by 4 percent in May when compared to May 2016. Auckland’s total housing stock grew by a massive 50.8 percent over the year, with Waikato up 18.9 percent, Bay of Plenty up 5.1 percent, Wellington up 13.2 percent, and Canterbury up 4.1 percent. While the remaining 14 regions all experienced a fall in housing stock in May, there is evidence that some regions are taking their lead from Auckland.

According to separate figures from Barfoot & Thompson, the total number of properties on the Auckland market has grown by 40 percent over the year, including 1,734 new listings in May - an increase of 34.1 percent from April when there were 1,293 new listings. "Total listings at 4,298 were up a little on last month’s but were more than 40% higher than at the same time last year. It suggests the price slow-down is not leading to a greater number of people than normal listing their property for sale.” said Barfoot & Thompson managing director Peter Thompson.

The average sales price in Auckland for the month was $942,717, which was up 2.8 percent from April. While there is greater pressure on prices to fall due to increased stock, both the average and median prices have barely moved over the previous three months. "On a year-on-year basis the average price is now running under 8% higher and the median price is 4.5% higher.” said Thompson. Price data from realestate.co.nz shows a similar situation, with the average asking price coming in at $962,196. While this is stubbornly high with respect to increased stock levels, it hasn’t gone up by more than 1 percent per month since September 2016.

Price growth in Auckland will depend greatly on supply levels, with attempts to boost housing volume recently dealt a blow by a decline in building consents. According to data from Statistics New Zealand, the number of new dwelling consents fell by 7.6 percent in April compared to March. While 2,106 new consents in Auckland still represents a rise of 9.3 percent from the previous year, this growth is far from even and not yet reflected at a regional level. “There is still a large amount of pent-up demand, especially in Auckland, following strong population growth and low building in earlier years. But the pickup in consents may be gradual." said Westpac senior economist Satish Ranchhod, adding “These factors don’t negate the need for more building but they might mean that the construction cycle is protracted.”

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