The first week of new listings and a weekend of open homes in level 2 New Zealand has real estate agents outside of Auckland touching wood for the traditional spring pick up.
But we’re not out of the woods yet.
Joe Nidd, owner of Nidd Realty in Dunedin, says that open homes on the first weekend of level 2 and the city’s pick up in listings – 100 new listings so far in September, including 30 in a single day – is “super good”.
“The number of people at open home inspections was better than expected. It’s what we’d hoped. A number of people made decisions in an uncertain market, and now it’s good to see the market is back out there and people have pressed go,” he says.
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“We’ve seen listings for Dunedin a little above what you’d expect for this time of year.”
Among those new listings are two do-up character homes aimed at first home buyers and renovators - one a mortgagee sale on Maitland Street, the other a three-bedroom "charmer" on North Road.
At the other end of the scale are a four-bedroom renovated home in the city's Caversham suburb, which is for sale by deadline treaty, and a four-bedroom character bungalow on Maori Hill that goes to auction tomorrow.
Nidd says listings this August were well down on August last year’s 203, and sales just reported by the Real Estate Institute of New Zealand of 117 were well below July’s 134 and last August’s 145.
A luxury home in Caversham, Dunedin, is up for grabs this month. Photo / Supplied
“Sales aren’t an indicator of demand. The lack of supply is because a lot of rental stock is not coming to [the] market. It doesn’t take much to tip the balance.”
Nidd is optimistic that the bump in listings will have a flow-on effect to break the gridlock of vendors holding off listing because they’ve got nothing to move to. “People will find there is choice now and they might start moving.”
Harcourts Dunedin director Richard Stringer says that despite steady open home activity this weekend, the spring uplift he was expecting was missing.
A three-bedroom charmer on North Road aimed at first home buyers is one of Dunedin's new listings. Photo / Supplied
“Some people are taking a cautious approach, others are going about as normal,” he says, adding that a couple of properties listed during lockdown, and one since, already have offers, while several investment properties were sold sight unseen during lockdown.
“There’s still an imbalance, we’ve got about half the volume of listings that we’d want.”
Stringer says properties are being snapped up, with the city’s median days to sell dropping to 20 days from the 30-40 days of a more balanced market.
REINZ data show that August ended with just eight weeks worth of properties to sell, four weeks less than the same time last year.
In Christchurch, Bayleys general manager of sales, Rachel Dovey, says that at the company’s first in-person auctions last week, all nine properties sold.
“It was an orchestrated army operation complying with getting numbers in and out of the auction room, we had 60 bidders. A first-home buyer property had 14 registered parties and extraordinary bidding, all the properties had at least two bidders, some had five or six.”
The three bedroom, nine-year-old home at Russell Street, Linwood, sold for $720,000 to first-home buyers, nearly twice its 2019 council ratings valuation of $390,000.
A three-bedroom home on Russell Street in Linwood, Christchurch sold for $720,000 with 14 bidders competing. Photo / Supplied
Dovey says while there are plenty of new properties in campaign planning, listings levels are not quite up to spring expectations. Phone bidding is now coming from buyers outside Canterbury, as well as locals on the move, adding to demand pressures on an already tight supply.
Dovey anticipates the already tight selling cycles to get sold and moved before Christmas will be condensed this year.
Jane Meyer, executive manager of Harcourts Papanui, told OneRoof that while listings are ramping up, it may be a “false flush”.
“It’s the backlog of those who waited for levels to drop, so it’s making September look amazing. But demand is still exceeding supply, we’d sold everything we could during level 4, the market didn’t glitch.”
In Wellington, Tommy’s sales director and principal Nicki Cruickshank says that while vendors are a lot less hesitant coming out of lockdown than they were last year, agencies are running out of stock and open home numbers this weekend are down on pre-lockdown.
Over 90 homes in new developments sold over lockdown in Wellington. Photo / Supplied
“There’s probably a bit of hesitancy, even in level 2. Wellington is like a ghost town, a lot of government departments are still staying home and it feels more like level 3.”
She says new listings coming in are about normal, but with only around 300 listings in the city, that’s less than half the ideal number of 600-700.
“We might get to that by November, but we need to be uninterrupted until Christmas. If we’re selling 300-odd properties then we need 400 listings to get a good pipeline.
“It’s the worst I’ve seen in 17 years. Over-supply won’t happen this year, my guess is maybe by March next year as restrictions and credit rules come down hard.
“We’re in that cycle where people won’t move until they’ve found something, so they’re just sitting.”
Cruickshank says that selling some 90 apartments off-the-plans in two new developments during lockdown helped meet some demand, but builders reliant on Auckland factories and supply chains are now nervous about meeting construction deadlines.
Antonia Brown, sales director and partner of Harcourts Wellington, concurs about the listings shortage, but says that even with early indications of a strong lift in listings going into level 2, the number of properties available is less than demand.
And in Hamilton, Jeremy O’Rourke, managing director of Lodge Real Estate, echoes the same sentiments, although he’d noticed that in July and early August, vendors were starting to feel confident enough to sell first before they bought.
“Listings were at four to six weeks’ stock, but we need three months stock to be at equilibrium level. Listings were about half what they should be going into level 2,” he says.
“We sold 17 properties at auction the first week of lockdown at prices that surprised us. But new listings will only meet the demand that’s already there, it won’t count for new demand.”
O’Rourke says attendance at open homes this first weekend was about one-third down on typical numbers, but expects that to grow.
“It’s a lot better than last lockdown, where we came from a standing start. This time we kept a lot of interest going and it’s more of a rolling start.”
