Winter chill cuts house-price hopes

Photo / Janna Dixon

House prices are falling as sellers meet the winter market, says a report on the state of the sector.

Realestate.co.nz, one of the country's biggest websites which is half-owned by the Real Estate Institute, said sellers were lowering their price expectations.

It noted a 4 per cent fall in asking price expectations from new listings last month.

"Sellers are aware of the state of the market and price accordingly," the report said.

The site collects data from many of the big real estate firms and found a large number of unsold houses on the market.

Last month, 11,733 houses were listed nationally, down 4 per cent on April.

New Zealand now has 51,980 houses listed for sale, the website found. That ais the equivalent of about 47 weeks of unsold stock and the inventory has been rising steadily in the past 11 months.

"The fall in the asking price expectation of new listings coming on to the market in May would seem to indicate that the state of the market is driving behaviour among new sellers to price property to meet the market," the report said.

"Given the high levels of inventory of unsold homes matched to sluggish property sales, something has to give and price is what has been adjusted."

Figures from the Real Estate Institute in April showed 5207 properties sold, compared to 6210 sold in April last year.

"This means that to achieve a secure sale in today's market requires sellers to price at a competitive level relative to other similar properties on the market," it said.

Auckland's housing market is in a better state than the national housing market. The report said the mean asking price in Auckland fell 2 per cent drop, and the number of listings dropped slightly from April to May.

In March, 4568 Auckland houses were listed, dropping to 4027 houses in April and 3826 by last month.

The inventory of unsold houses stood at 38 weeks in March, 40 weeks in April and 37.9 weeks last month.

The report ruled out any flow-on effects from the Budget, a factor cited widely by some real estate agencies as dampening the market before the Budget was released.

The report said there was no evidence within the daily data of new listings coming on to the market that the asking price had been affected by the Budget.

New listings slowed considerably, the report said. That contradicts predictions made by some experts that landlords might flood the sector with flats and houses for-sale.

Property Investors Federation vice-president Andrew King welcomed parts of the Budget's housing statement including the IRD crackdown on investors who disobey the law.

FOR SALE

National mean asking price:
* March: $422,648
* April: $422,520
* May: $407,439
* Change: -4 per cent

Auckland mean asking price:
* March: $547,579
* April: $530,121
* May: $518,853
* Change: - 2 per cent

Source: NZ Property Report by realestate.co.nz