Is it all about the shiny and new?

Date: 21 May 2018

When a property is recently listed on the market for sale, it gets the shiny ‘new listing’ label. In our data analyses, we classify ‘new listings’ as properties that have newly been listed in the last week. “They’re a good indicator of market confidence and play a role in influencing price pressures”, Head of Research Nick Goodall explains. 
According to the latest NZ Property and Economic Update Report, even though new listings have eased off over the past 3-4 weeks, the only areas where ‘new listing’ activity figures are lower than those enjoyed a year ago are in Wellington and Canterbury. Otago’s new listings have shot up (this could be vendors looking to cash in on recent value improvements, or perhaps its property investors exiting the market before new rental quality requirements becoming law). If you look at NZ as a whole, new listings are actually up 5% on the same time last year.
But, it’s not all about the shiny and new. To get a fuller picture, we also measure the ‘total’ number of properties listed for sale in NZ. As well as new listings, this figure incorporates those properties that were listed prior to the last week. More choice of properties often means less price pressure, and vice versa. Nationwide, total listings are actually 8% higher than they were a year ago - driven by Waikato and Auckland, while Wellington remains near all-time lows, flat year-on-year and down 23% on the same time two years ago.
OK - so we’ve got many areas with more properties on the market than last year: but what can listings tell us about other market dynamics?  And what’s the picture looking like for actual sales? 
Well, for starters: total listings can make it easier to understand localised price pressures. 
The upwards price pressures happening in Wellington are easy to put into context against a 10% drop in new listings and zero movement in total listings against last year. Even dropping demand hasn’t dented the upward price pressure, showing how powerful a lack of listings can be. Wellington’s first home buyers (32% of sales) and ‘multiple property owners’ (35%) will know all about that. For first home buyers, this is a record-breaking level and for multiple property owners, non-mortgaged buyers are holding up their overall share as those requiring mortgages continue to struggle for finance.. “It’s an interesting dynamic: both groups are impacted by tighter credit tests, but are also faced with price pressure requiring competitive offers for properties. Unlike ‘movers’ who have dropped right off to just 20%, their lowest share of property in the history of our time series! 
Over 9,500 properties sold last month. This level of sales volume is down 2% year-on-year across New Zealand, but as Goodall notes: “the pace of decline is certainly slowing and actually, there are tentative signs that some parts of the country are past the worst of poor performance. If you look at the ‘last three months combined’ figures for Hamilton, Christchurch and Dunedin, they’re actually higher than they were one year ago.  It’s unfortunately a different story for Tauranga and Wellington, where 3 month sales volumes compared year on year are -3% (Wellington) and -9% (Tauranga). 
So yes: listings have a major role to play: but it’s not all about the shiny and new. How about value performance then? …well that’s a whole different story. To get a better picture about what’s happening with NZ property, download your free copy of the report here.

Tags: New Listings, Property, New Zealand,