Green shoots appear in the property market ahead of spring

The latest data from realestate.co.nz signals that green shoots are beginning to appear in the market, with the national average asking price trending up and new listings flat after 10 months of double-digit year-on-year reductions. 

• New listings seeing some positive growth
• Stock decline reflecting lack of new listings in 2023
• Average asking prices continue to track upwards
• An uptick in confidence and demand for the New Zealand property market

Vanessa Williams, spokesperson for realestate.co.nz, says demand is up, and confidence appears to be returning to the market:

“Kiwis are continuing to slip off their shoes and into open homes. We're seeing more people searching for property on realestate.co.nz, and the number of homes for sale by auction is on the rise." 

"Spring is typically a time for new growth and beginnings – it looks like it’s come early to the property market this year. Although with the election right around the corner, the growth might be gradual as Kiwis wait to see what happens with the government." 
  

New listings seeing some positive growth  

After 10 months of double-digit year-on-year drops, new listings nationally remained flat during August (down just 0.6%). Eight of 19 regions saw the number of new listings coming onto the market increase year-on-year during August. Comparatively, just one region saw growth during July. 

The regions where new listings increased compared to August 2022 were Auckland (5.5%), Southland (6.6%), West Coast (7.1%), Northland (9.6%), Canterbury (14.4%), Nelson & Bays (18.8%), Central North Island (24.7%), and Marlborough (29.1%).

Vanessa says this is a positive direction for the market:

"It's a bit early to say whether the tide is turning, but we have some 'green shoots' coming into spring. Vendors are perhaps ready to step out of winter hibernation." 

Compared to July 2023, new listings were up 20.9% nationally and in all except two regions. 

"Vendors appeared to have been busy listing their properties during August," says Vanessa. 

Stock decline reflecting lack of new listings in 2023

The lack of new listings hitting the market over the last 10 months is eating into the total pool of properties available for buyers. National stock was down 10.6% during August, the second month in a row where stock numbers have dropped by more than 10% year-on-year.

"At the beginning of this year, we saw high stock levels and low new listing numbers. This is a symptom of a slower market where it takes time for stock to cycle through and reflect the lack of new properties coming onto the market."

Month-on-month, stock levels have been trending downwards since March this year. 

"The total number of homes available for sale nationally has been in decline for almost half a year; over this same period, we have also seen the national average asking price trend upwards." 

"Supply and demand is at play here – among the many other factors impacting the market,” Vanessa says.

Average asking prices continue to track upwards

Although still down nationally compared to August 2022, prices appear to be turning green. The national average asking price, which was $872,942 last month, has been trending upwards since March.

Similarly, Waikato, Bay of Plenty, Nelson & Bays, West Coast, and Canterbury have seen a general upward trend in their average asking prices since March 2023. 

Vanessa says the steady growth suggests the property market is in recovery.

"COVID-19 stimulated the market more than we could have imagined. Case in point is that, at its peak in January 2022, the national average asking price was just shy of $1 million at $989,235." 

"We might not be seeing prices quite that high now, but if we compare August's average asking price to our last 'normal' August in 2019, we are still up 28.4% or almost $200,000." 

She adds that property is a long-term investment, with Kiwis, on average, selling their home every five and a half years.

In our regions, the West Coast hit a 16-year record high last month of $485,687. Central Otago/Lakes District, which peaked at just over $1.5 million for the first time last month, saw prices fall back by 16.2% to $1,287,378 in August.

An uptick in confidence and demand for the New Zealand property market

Confidence appears to be returning to the market, with more Kiwis opting to sell via auction. 

Data from realestate.co.nz shows that the number of auction listings during June, July, and August increased considerably on pre-COVID-19 levels. 

Vanessa says that auctions are generally more popular when competition in the market is high, while negotiation and display price listings increase when the market is cooler – as seen in 2022.

"More properties going under the hammer signals more confidence in the market. It is a sign that the market is beginning to be stimulated again – even if not quite to levels seen in the warmer months of 2021." 

She adds that the OCR remaining flat for the third consecutive time might give buyers more confidence when bidding at auction. 

In August, the number of people searching for property on realestate.co.nz was up year-on-year by 8.4%, while people using the realestate.co.nz app to search for property was up 35.5%*. 

"This is a clear indicator of demand. Plus, we are seeing an increase in more serious buyers; our app users are considerably more likely to enquire about a property," says Vanessa. 

Further confirming the increase in demand, Vanessa adds that open-home visitor numbers continue to be up around the country. 

*Source: Internal metrics (1-30 August 2022 v 1-30 August 2023). 

For media enquiries, please contact:

Hannah Franklin | hannah@realestate.co.nz

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