The volume of homes for sale is weighing heavily on the housing market

By Greg Ninness

The volume of unsold housing stock continues to weigh heavily on the housing market.

Property website Realestate.co.nz had a total 26,685 residential properties available for sale at the end of May 2023, while the Real Estate Institute of NZ reported just 5752 residential sales in the same month.

That means there were an average of about 4.6 properties available for sale for every property that sold last month.

The graph below shows the relationship between the end of month stock levels and monthly new listings on the Realestate.co.nz website, and compares them with the REINZ's monthly residential sales from January 2018 to May 2023.

It shows the gap between total stock and monthly sales steadily declined between May 2019 and mid-2021, hitting a record low in December 2020.

It then started to increase sharply from August 2021 and has remained at an elevated level since the beginning of last year.

Essentially this suggests the housing market currently has a bad case of indigestion and is struggling to convert properties that are on the market into sales.

That may not bring much joy to vendors, but for potential buyers it means there remains plenty of choice. For both groups there could be some hard bargaining involved to close a deal.

This story was originally published on Interest.co.nz and has been republished here with permission.