Wellington has officially become a buyers' market and Auckland may follow soon as the housing market starts to cool, realestate.co.nz data shows.
Total stock levels were up 32 percent nationally year-on-year in most regions during March. Realestate.co.nz said this is a telling sign there are more properties on the market for buyers to pursue.
"Inventory data shows that properties in Wellington are taking longer to sell than they have, on average, over the last 15 years. And the rate of sale also appears to have slowed in Auckland last month," said Vanessa Williams, spokesperson for realestate.co.nz.
"This could signal a future market shift led by our main centres. However, with a year-on-year average asking prices still strong around the country, we will have to wait a little longer before we can confirm any trends."
Despite the total stock levels being up, the number of new listings added to realestate.co.nz in March was down in 10 of its 19 regions compared to the previous year. It said the data suggests fewer vendors decided to list compared with March 2021, perhaps in the face of COVID-19 and inflation uncertainty.
"Despite a drop in the number of new listings last month, demand didn't dwindle. Latest user data shows that a record number of Kiwis (around 1.4 million users) browsed for property on realestate.co.nz during March with 45-54-year-olds the most active property seekers on the site," Williams said.
Wellington real estate data
Inventory data shows the Wellington buyers' market emerged in March, realestate.co.nz said. Inventory measures, theoretically, how long it would take to sell all current stock at the present rate of sale if no new listings came on to the market.
According to the data, if no new listings came onto the market in the Wellington region and all existing stock was sold, there would be no houses available to buy in 17 weeks - which is longer than the long-term average of 15 weeks.
"According to our seasonally-adjusted data, the last time Wellington was a buyers' market was almost eight years ago in June 2014," Williams said.
She added it's important to distinguish between what the data considers a buyers' market and what most people understand the term to mean.
"I think most people assume that a buyers' market means that purchasers hold most of the power in a negotiation. However, when it comes to the data, we are talking about how quickly properties are selling," Williams said.
"It is a good indication of where the market is heading, with a slowdown in sales typically being good news for buyers. But we shouldn't lose sight that the average asking price in the region is still over $1million - up 16.9 percent on the same month last year."
She said demand in the Wellington region remained high last month, with Waikanae, Karori, Eastbourne, Wellington Central and Otaki the top suburbs searched by users.
What this means for Auckland
Realestate.co.nz said a shift in turnover rates in Auckland could signal a buyers' market is on the way there too.
Last month, its data saw the gap close between the current sales rate of 20 weeks and the long-term average of 22 weeks to 'sell out' all homes on the market.
"We haven't seen a buyers' market in Auckland since June 2020, so this is something to watch over the next few months," Williams said.
"Typically, we see our main centres leading the rest of the country with property trends, so if the city of sails follows Wellington's lead, we might be in for a fascinating 2022."
How average asking prices have changed
Average asking prices hit all-time highs in five of realestate.co.nz's 19 regions last month, with Northland, Bay of Plenty and Canterbury reaching record highs for the second month in a row.
Nationally, average asking prices were up 16 percent year-on-year - with the average at $974,019 in March 2022. However, this is around $25,000 down from their record high in January.
Following on from the hint of a cooling market in February 2022, six regions saw their prices drop while another seven saw them remain static compared to the previous month.
"Rising property prices have been a big topic over the last few years; these drops might be encouraging for buyers," Williams said.
However, she warned with average asking prices still up year-on-year in all regions, it is too early to know just what these dips mean for the long term.
The six regions where average asking prices have dipped month on month are:
- Gisborne - down -1.8 percent to $682.911
- Taranaki - down -5.9 percent to $684,270
- Central Otago/Lakes District - down -3.5 percent to $1,279,283
- Marlborough - down -4.0 percent to $740,505
- Manawatu/Whanganui - down -1.1 percent to $696,615
- Coromandel - down -5.1 percent to $1,099,170.
Total number of homes available increases
For the first time since May 2019, more than 25,000 homes were available for purchase nationally last month - which is an increase of 32 percent compared to the same month in 2021.
Fourteen of New Zealand's 19 regions also saw significant rises to year-on-year stock levels in March 2022.
Offering the most choice for buyers, when compared to March 2021, was Wellington with 2181 total homes available for sale (up 158.7 percent), Manawatu/Whanganui with 1194 (up 105.2 percent) and Hawke's Bay with 747 (up 88.2 percent).
Data from realestate.co.nz showed stock levels have consistently been low over the past few years. Williams said reduced supply and high demand typically drive prices up, so it is "intriguing" to see this moving in a new direction.
"It is unsurprising that Wellington's stock more than doubled compared to the same month last year," she said.
"This is partly why the region tipped into a buyers' market last month."
New listings down in the majority of regions
The number of new listings coming onto the market during March was down in 10 of realestate.co.nz's 19 regions compared to March 2021.
Year-on-year, new listings were down -10.7 percent in Auckland, -20.5 percent in Gisborne, -15.3 percent in Taranaki, -10.0 percent in the West Coast, -1.5 percent in Canterbury, -8.5 percent in Southland, -4.4 percent in Coromandel, -19.5 percent in Central Otago/Lakes, -11.3 percent in Marlborough and -7.9 percent in Wairarapa.
"We usually see a drop off in new listings post-summer but with new listings lower than last year, the uncertainty around things like Omicron and inflation might be encouraging Kiwis to stay put instead of listing their home for sale," Williams said.
Bucking the trend with the most significant year-on-year increases were Nelson-Bays and Hawke's Bay, where new listings were up 31.5 percent and 24.2 percent, respectively.