Homes for sale hit a 12 year high for the time of year as asking prices fall again

The spring selling season has opened with more houses sitting on the market than at any early September in more than a decade, and with asking prices still drifting down.

Figures released on 1 September in the latest New Zealand Property Report from realestate.co.nz show 32,908 residential properties were listed for sale on the site at the end of August, 9.7 percent more than at the same point last year. Interest.co.nz reported that the total is a 12 year high for the time of year, and that the number of homes for sale has more than doubled since the boom year of 2021.

What makes the pile of unsold houses striking is that it has built up while relatively few new properties were coming to market. Just 8,326 new listings were added in August, down 5.1 percent on August last year. Eleven of the 19 regions recorded double digit annual falls in new listings, led by Wairarapa down 30.7 percent, Coromandel down 28.1 percent and Marlborough down 20.4 percent. Only Northland, the West Coast, Canterbury and Central Otago and the Lakes District saw more new listings than a year ago, and none of those increases reached 7 percent.

Fewer new listings and more stock at the same time points to older properties that are not selling. Sellers who came to market in autumn and winter are still there in spring, and now they will be competing with the wave of vendors who traditionally list once the weather turns.

On price, the picture depends on which measure you pick up. Realestate.co.nz reported a national average asking price of $849,362 for August, which it said was 3.2 percent below the August 2023 average of $877,158. Interest.co.nz, using the non seasonally adjusted series, put the August average at $824,144, down 2.0 percent on August last year. The two numbers sit on different bases and are not directly comparable, but they tell the same story about direction.

By the unadjusted measure, the national average asking price has now fallen for six months in a row and is down $74,533, or 8.3 percent, since February. Auckland has fallen further and faster. The average asking price in the country’s biggest market was $986,827 in August, down $110,921 or 10.1 percent since February.

Sarah Wood, chief executive of realestate.co.nz, argued that the longer view shows a market that has settled rather than one that is falling apart. “The striking thing about today’s market isn’t how much prices have changed, but how little they have,” she said. “Three years is a long time in property, and yet the national average asking price has changed by less than $28,000 since August 2023.”

What has changed, she said, is the amount of choice buyers have. There are almost 45 percent more properties available for sale than there were three years ago, and August’s new listings were nearly 12 percent higher than in August 2023 even after this year’s fall. “Buyers have considerably more options, but we haven’t seen that translate into a dramatic shift in asking prices,” Wood said. She described the market as steadier than the swings earlier this decade, adding that three years of relatively flat asking prices “suggest we may be looking less at a market waiting for the next big correction, and more at one that has found its new normal.”

The national averages hide very large regional gaps. Thirteen regions recorded a year on year drop in average asking price in August. Gisborne fell 27.9 percent and Wairarapa fell 10.8 percent. Otago slipped below $600,000 for the first time since October last year, at $587,898. Southland went the other way and was the only region with double digit annual growth, up 11.2 percent to $611,475.

Wood put that spread down to local conditions rather than any single national driver. “After several years of significant economic and policy change, local market fundamentals are increasingly coming to the fore,” she said. “Employment, population movement, affordability, buyer confidence, and the balance between supply and demand are all playing a greater role in determining what happens to prices in individual regions.”

Stock grew by double digits in eight regions. Gisborne led with a 26.4 percent rise, although off a small base of 154 properties, followed by Taranaki on 22.3 percent, Coromandel on 17.2 percent, Marlborough and Manawatu and Whanganui on 13.0 percent, Wellington on 12.9 percent, Wairarapa on 12.6 percent and Auckland on 11.5 percent.

For anyone thinking about selling this spring, the practical message from the data is that a listing has to earn attention. “When choice is plentiful, buyers can afford to be more discerning, and properties are competing harder for attention,” Wood said. “It puts greater emphasis on vendors understanding their local market and being realistic about where their property sits within it.”

The other thing hanging over the market is the cost of borrowing, which is now moving up rather than down. The official cash rate sits at 2.50 percent after the Reserve Bank lifted it by 25 basis points on 8 July, the first increase since 2023. The next call comes at 2pm on Wednesday 2 September alongside a full Monetary Policy Statement, and all five big bank economics teams expect another 25 point rise to 2.75 percent. You can check the current rate and the next announcement date on our OCR tracker.

A rising cash rate feeds into mortgage rates, which shrinks what buyers can borrow. That is the opposite of the tailwind vendors normally hope for at the start of spring. With more than 32,000 homes already competing for a limited pool of buyers, and the borrowing cost of those buyers heading in the wrong direction for sellers, the balance of power looks likely to stay where it has been for most of the past year.

Are you buying or selling this spring, and what are you seeing in your own patch of the market? Tell us in the comments below.

This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂