Auckland property market favouring sellers: report

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The Auckland property market has reached a tipping point as a significant fall in new listings, coupled with a late rush of summer sales, pushes the market in favour of sellers for the first time in more than 18 months.

The latest New Zealand Property Report from Realestate.co.nz puts the number of new listings nationally at 9,898 during May, down 15 per cent on the same time last year.

The lower number of listings had a big impact on housing inventory in key markets including Auckland, where the level of unsold homes fell below the long-term average of 34 weeks, to just 30 weeks, Realestate.co.nz's chief executive Alistair Helm said.

The number of new property listings reached 3417 in Auckland during May, down 11 per cent from a year earlier.

Nationally housing inventory, fell significantly from 54 weeks in April to 47 weeks in May.

Meanwhile the average national asking price fell from last month's record high of $429,249 to $414,308, as the market entered the traditionally quieter autumn/winter period.

Five of the 19 regions survey, including Wellington and Queenstown Lakes, recorded declines of more than five per cent during the month.

Those regions also recorded low levels of inventory, Helm said.

Helm said higher sales activity in the first quarter of the year combined with comparatively low numbers of new listings had contracted the Auckland market, shifting the balance in favour of sellers for the first time in more than a year and a half.

"There is a level of confidence here from sellers that we haven't seen in a long while. The cyclical trend we saw following the impact of the global financial crisis in winter 2009 is balancing out and normalising the property market again to some degree."

Helm said that if current trends continue in Auckland, the region could see a shortfall in new listings emerging during the winter months.

While the level of inventory was giving vendors the upper hand in Auckland and Queenstown, 10 of the 19 regions were still predominantly favouring buyers, Helm said.

"We are clearly seeing a 'two-speed' property market in New Zealand at this time, with Auckland leading the rest of the country in levels of property activity," he said.

Both Auckland and Queenstown were seeing the results of stronger sales matched with lower levels of new listings, while four other regions were also showing signs of having more balanced markets.

Otago, the West Coast, Waikato and the Bay of Plenty were "edging to a turning point in the market with more balance between buyers and sellers", Helm said.

ASB economist Christina Leung said contained level of inventory, positive migration and population growth, as well as the recent drop in interest rates were all positive for the property market over the year ahead.

"We expect nationwide prices are troughing out now, and should increase by around 3 per cent over the year ahead. Behind this lift will be a range of experiences, from stronger price appreciation in areas such as Auckland, and ongoing weakness in areas where population and income growth are less supportive," she said.