The number of listings for new-builds has risen in the last year while the asking prices have fallen, with agents saying it’s an absolute buyer’s market that won’t be around for long.
There were 1343 new-build properties listed for sale on OneRoof in the first four months of 2023, up 24% on the same period last year.
Auckland and Canterbury had the highest volume of new-home listings for sale with suburbs such as Massey, New Lynn, Flat Bush and Rolleston carrying most of the stock, analysis of OneRoof listings revealed.
The average search prices have also dropped significantly, with Auckland’s down 6.7% ($95,000) to $1.314 million and Canterbury’s down 6.5% ($63,000) to $909,042. Of the suburbs with 10 or more new listings in 2023, Silverdale saw the biggest drop in average search price year-on-year: down $730,000 to $1.4m, although this was more to do with the difference in the type of stock coming to market than changes in market conditions.
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The number of new listings for new-builds grew 20% to 760 in Auckland in the first four months of 2023 compared to the same period last year, and the majority were in Waitakere and Manukau City.
Ray White Manukau co-owner Tom Rawson said there were “ample” new-builds coming on the market and that was largely due to the huge number of development properties bought 18 months ago all being completed around the same time.
“There’s no epidemic or anything like that. There's no real reason other than finally everyone is getting their work completed because they’ve had a good run.”
Flat Bush had the largest number of listings with 45 on OneRoof in the first four months of this year and an average search price of $1.49m, down 0.6% year-on-year.
There were also numerous infill developments popping up all around South Auckland including seven townhouses at 5 Grange Road in Papatoetoe. Ray White Manukau was also about to list a nine-townhouse development on Burrough Street in Manurewa. Both were built on sites where there was previously just one home.
Wallace and Stratton chief executive Ben Macky said the oversupply of completed new-builds and fewer buyers had led to developers significantly discounting properties to sell them.
“A lot of people were holding out for a long time thinking the market would correct itself, the market hasn’t corrected itself, and now the developers are having to drop their prices in order to sell the product, and in many cases they are losing money on their product.”
New-build townhouses for sale at 30-32 Westgate Drive, in Westgate, Auckland. Photo / Supplied
New-builds are for sale in both new subdivisions and on infill sites such as this townhouse on Grange Road in Papatoetoe. Photo / Supplied
And it was those price drops drawing buyers – especially first-home buyers – back in.
“The buyers have a lot of choice and it’s an amazing time to buy because they will get a significant discount.”
But these good buys would not last forever, he warned, because the rate of new homes being built was likely to slow down and by next year there could be less stock but more buyers competing for it again.
Massey had the second largest number of listings in the reported period, but its average search price took the biggest hit down 11% to $896,795 year-on-year, the data showed.
Macky said developers were able to buy larger sections at a lower price in areas such as Massey which had prompted all the building there. A three-bedroom, two-bathroom property in Westgate Drive at Anston Westgate is currently for sale and is one of 35 terraced homes in the development.
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A development with two-bedroom apartments on Henderson Valley Road in Henderson priced from $499,000 was proving popular and buyers had been snapping them up, he said.
Macky disagreed there were more properties for sale this year compared to the last few years and said the big difference now was that the only new houses being marketed were ones near completion or completed and this was where there was an oversupply.
“Two years ago, we did stuff that was 100% off-the-plan and wouldn’t be due for completion for 18 months and we would sell that project down really quickly. Now what we are seeing is that the buyers are focusing on product that is completed.”
He put the increase in listings down to the fact that previously one listing might have been for all the houses in an entire development whereas now there might be a listing for each completed house and, in some cases, there might be multiple listings for the same property if several agencies were trying to sell it.
SM Property director Scott Muirson agreed with Macky on stock levels and said one of the main reasons properties were being listed much later in their development stage compared with a year ago and this was largely down to financing.
New homes under construction in Christchurch in 2022. Photo / Peter Meecham
A three-bedroom home on Navarra Road in Halswell just sold for $778,000 and there are plenty more houses for sale in the subdivision. Photo / Supplied
But not all builders' developers were prepared to take a hit and Harcourts Mount Roskill business owner Nick Kochhar said the ones that didn’t have financial pressure were waiting about six months before putting them on the market.
Others had just slowed down or stopped their projects. “They were going 100kmph and now they are going 40kmph.”
He had recently sold three of four four-bedroom duplexes at 4 Penney Avenue within five weeks for $1.19m, $1.175m and $1.168m due to having a realistic vendor. The remaining duplex is still for sale for $1.169m.
Rather than putting all the new-builds in the development for sale all at once, some were selling some and renting out the rest.
The number of listings for new-builds also rose in Canterbury and, according to Ray White Metro sales manager Richard Withy, there were some bargains to be had.
There were 256 new-build listings in Canterbury for the first four months of 2023, up 2% on the same period last year. Of those listings in Canterbury, 172 were in Christchurch which saw an 11% increase in listings.
Withy said there were plenty of new-builds for sale in pockets of newer subdivisions such as Halswell and further out in areas like Rolleston, Lincoln, Rangiora and Woodend.
There was also a large supply of townhouses in the city for sale at competitive prices, he said.
“They are selling, but it’s competitive. Buyers do have choice in that marketplace of newer homes or brand-new homes.
“You go to Halswell, there’s a 100-plus new three- or four-bedroom houses, whereas in years gone by there hasn’t been the same building level.”
A three-bedroom, two-bathroom home on a 621sqm site on Halswell Junction Road in Halswell recently sold last month for $830,000, while a slightly smaller three-bedroom, two-bathroom home on Navarra Road fetched $778,000.
However, as builders and developers started being more cautious stock levels could start to drop as not as many properties were built, he said.
“You have choice, you’ve got a little bit more ability to negotiation whereas I would probably question if that would be the same in six months or 12 months' time in that market because there won’t be as much available.”
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