The short supply of houses on the market continues to be a major issue, the latest August residential real estate data from the Real Estate Institute of New Zealand (REINZ) reveals.
Properties available for sale fell by 18% year-on-year and five regions now have less than 12 weeks of supply, representing almost 70% of sales volumes.
Wellington has seven weeks of supply available, with Otago at just 10 weeks supply and Auckland, Waikato/Bay of Plenty and Hawke’s Bay with 11 weeks supply.
Two regions have hit new record high median sale prices in August, according to the REINZ data.
Auckland reached $842,500 (up 14% year-on-year, or $102,500) and Nelson/Marlborough hit $430,000 (up 12% year-on-year, or $45,000).
Real Estate Institute of New Zealand (REINZ) spokesperson Bryan Thomson says, “The underlying trends in demand and listings indicate that price expectations remain firm across the country.
“The indications are that the struggle for stock is the biggest factor driving market behaviour and price expectations across the country, as we await Spring listings.
“We have been highlighting the lack of inventory for some time, and it continues to be a major contributing factor in the volume of sales across all regions. This is particularly so in Auckland, where inventory levels are at historic lows," he said.
"The continued shortage of listings coupled with the impact of the LVR changes on investors is seeing sales volumes more muted than expected at this time of year."
Although supply continues to fall, Colliers International NZ recently said the Reserve Bank's decision to extend its higher loan to value ratios exemption on new-build houses was 'a leap' for new housing supply and the momentum must continue.
National director of residential project marketing Pete Evans says at a time of an extreme housing shortage, it is encouraging to see different organisations come together in a unified approach to Auckland’s housing woes.
“We were pleased to see the Property Council’s work with the Reserve Bank on excluding higher loan to value ratios on new houses. The Reserve Bank’s exemption for off-the-plan projects and bare land for development means lower deposit requirements for purchasers of newly built homes,” says Evans.
“We support Property Council’s call for the exemption to be extended to new houses supplied to the market by builders and contractors, most of whom typically buy serviced sections from developers and subsequently build dwellings to offer to the market as housing packages,” he says.
Colliers international project manager of residential project marketing, Will Coates says, “Through painstaking work, the Reserve Bank, Auckland Council and the Independent Hearing Panel on the Unitary Plan and the Property Council are paving the way to bring more supply into the housing market.
“But we are concerned about the ongoing critical lack of economies of scale to meet the need for the 91,000 dwellings Auckland needs over the next seven years. We encourage New Zealand’s main banks to maintain funding support to established and emerging developers in Auckland’s market.
“At the moment, banks seem to be cautious about lending to ‘new’ residential developers. However, to get momentum and more houses on the ground in Auckland, we hope financiers can find a way to offer more support to emerging developers," said Coates.