Realestate.co.nz data suggest vendors quitting market

Wednesday, 28 February 2018

Inventory levels are down but one economist says that's unlikely to be because there's been a rush on house sales.

A drop in the number of houses available for sale is more likely a result of people pulling their properties off the market than a surge of sales, an analyst says.

Property listings website Realestate.co.nz has released its latest data, for February.

It shows the number of houses for sale fell over the past month - down by 4.5 per cent in Auckland and 5 per cent in Wellington.

Total inventory numbers fell in 13 of the 19 regions Realestate.co.nz covers. Although numbers are still up on the same time last year, due to a slower market, the rate of growth is slowing.

In February, there were 24,848 houses listed for sale, compared to 25,155 in January 2018, a drop of 1.2 per cent.

ASB economist Kim Mundy said, given how subdued sales activity had been recently, it seemed more likely that vendors were changing their minds about selling, than that there had been a rush of purchases.

'Sellers withdrawing properties from the market is a natural response to the slowing in demand we have seen over the last six or so months.

'Those who do not need to sell are choosing to wait, rather than accept a lower than desired price. But, as withdrawn properties keep inventory levels low, this 'tightening' is likely to provide some support to prices in the meantime.'

She said that would be confirmed when the Real Estate Institute issued its data, showing the number of sales transacted in the month.

The trend could be expected to continue for a while, she said. There would be a sustained period of subdued demand, especially from investors.

Realestate.co.nz data showed the number of new listings was down in most parts of the country. Nationwide, it was 4.5 per cent lower than February 2018.

Otago had the biggest fall in new listings, down 14.4 per cent.

The average asking price increased by 1.1 per cent, to $654,351.

Southland had the biggest price increase, up 1.9 per cent.