This hardly needs explaining. Lower listings combined with higher demand pushes up prices. What are the reasons?
1. Sellers will only sell if they believe they will cash in handsomely if they do so.
2. Fear that selling may attract some sort of taxation punishment in the near future as promised by some political parties.
3. That whatever a property sells for, it will cost just as much, if not more, to replace it.
4. Lingering fears over recession.
5. Not enough new stock being built.
6. More buyers chasing fewer properties now that interest rates are low.
7. Owners who were just making ends meet a few years ago, now find that they can afford their mortgages, so the pressure has come off them.
8. Conversely, in some areas price expectations have dropped ( see diagram above) and in the good old Kiwi tradition, if people don’t get the price they want, they don’t sell.
There are many more reasons as well and readers are invited to send me what they think are additional pressures for the reason that listings continue to fall.
April 6, 2013 -David Chaston
The number of new listings in the New Zealand real estate markets continues to fall, especially in the main urban centres.
In March, new listings were down 3% on February and 4% lower on the same month a year ago.
The decrease in new listings was particularly apparent in the major centres, with Wellington and Canterbury experiencing falls of 9.9% and 8.6% respectively from the same time last year, with Auckland’s figure falling by 4.6%.
“The number of new listings in major centres is not keeping up with demand. This fall in listings is reflected in the strong growth in asking prices these regions have seen,” says Paul McKenzie, a spokesperson for realestate.co.nz who released the data as part of their monthly New Zealand Property Report.
The 12,732 new listings that came to market in March did little to ease the record low in inventory seen last month.
Inventory of unsold properties – measured by weeks of equivalent sales – settled at 27 weeks. While this is a marginal increase on last month’s 26.2 weeks, it is still 20% less than March 2012, and well down on the long term average of 39 weeks.
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