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New Zealand's housing market leans overwhelmingly in favour of sellers with the drop in listings now critical, according to the real estate industry.
The number of homes now available for sale has dropped to its lowest point since January 2008, as continuing high demand and a shortage of new listings have tightened the market even further, says Realestate.co.nz.
In June, the national inventory of homes for sale dropped below 30 weeks for the first time in four years to 29.8, far below the long term average of 41 weeks, Realestate.co.nz's monthly NZ Property Report released today shows.
Inventory is measured by the projected number of weeks it would take to clear existing stock of unsold homes on the market, matched to the longer term average based on five years of seasonally adjusted data.
The ever steepening drop in inventory that has been registering in almost every region for the past six months has now reached a critical point, overwhelmingly leaning the market in favour of sellers across the nation, said Alistair Helm, CEO of Realestate.co.nz.
"Sales of homes are up 20% year on year, but the numbers of new listings just haven't kept pace, so demand continues to outstrip supply," Helm said.
Each of the key regions - Auckland, Wellington and Canterbury - registered some of their lowest levels of inventory on record in June, "simply because buyers have been so active," he said.
Helm said buyer demand has also now pushed inventory in regions from Waikato, Hawke's Bay and the Wairarapa to Otago, West Coast, and Queenstown to levels well below their long-term averages.
"With inventory levels so low, not one region of New Zealand can now be described a buyer's market, even though buyer demand is what's driving the market activity."
However, this morning Finance Minister Bill English said that he didn't think the country was on the edge of a housing boom.
"We've got a bit of price pressure in the central Auckland housing market, but everywhere else, it's pretty flat," English said on TV ONE's Q+A programme.
"You've just got to look at the credit growth for housing is only a little bit above zero, so we're not on the edge of a housing boom."
Pre-winter surge not enough
Helm said while the pre-winter surge of new listings that was registered in May tailed off a little in June, with levels falling 16% from the previous month to 9,689, it has not been significant enough to boost inventory in the face of the high demand.
He also said that while the high demand for homes helped push average asking prices up to record levels last month, seller expectations balanced out somewhat in June, with the seasonally adjusted average price falling slightly to $424,315.
"It will be interesting to see how the ongoing demand for property affects asking prices over the remaining winter months," Helm said.
"Although it's been cold, home hunters are still on the trail of hot property and that will no doubt continue to be on sellers' minds."
The latest issue of the NZ Property Report plus more analysis of the property market can be found at Unconditional , the news and information website for New Zealand real estate.