Housing construction is already an election issue. Photo by Gerard O'Brien.
The housing sector remains firmly a seller's market, despite
a 5% boost to January listings of 9267 new properties and
near-record asking prices.
With listings down overall but demand and prices increasing,
analysts are picking only a slight easing in the housing
market, which will, however, be hit by the Reserve Bank
raising the official cash rate in March.
The market's overall inventory was 6.3% down on a year ago,
and house prices were likely to continue rising this year,
ASB economist Daniel Smith said.
January's data from realestate.co.nz showed a ''reassuring
rebound'' in the number of houses coming to market,
especially in ''pressurised'' Auckland, where the number of
homes on the market was 12.2% down, he said.
''However, total supply remains very low by historical
standards and that is unlikely to turn around quickly,'' Mr
National marketing manager Paul McKenzie said of 19 regions
across New Zealand tracked by realestate.co.nz, 13 booked an
increase in January listings, compared with a year ago.
''The new calendar year starts with a healthy flow of new
listings, which will help meet the rising demand for property
that historically is seen in the coming months of February
and March,'' he said.
Eight regions booked an increase in asking prices, led by
Coromandel, which was up almost 29%, while 11 regions saw
declines, led by the Central Otago-Lakes region, which was
Prices of new listings also rebounded, the mean national
price reaching $476,979, just $5200 short of last October's
Otago and Canterbury recorded their own record highs, Otago
up 1.6% at $304,720 and Canterbury up 11.5% at $449,149.
Mr Smith said: ''We expect steady house-price appreciation to
continue, albeit not quite at the pace seen over 2013''.
With the housing market ''pressures set to persist'' and the
economy improving, he expected the Reserve Bank to start its
gradual cycle of hiking the official cash rate in March, Mr
Mr McKenzie said across 13 of the 19 regions the housing
inventory in January was 40,219, up from 38,804 in December.
''The market remains firmly a seller's market and inventory
on the market remains well below the long-term average of 37
weeks of equivalent sales,'' he said.
Mr Smith said the 15.4% increase in January listings over
December was ''more of a reversal of weakness than a genuine
''Housing market data can be quite volatile around the
holiday period and this year proved no exception,'' he said.
Mr Smith, along with most other analysts, said the Reserve
Bank's loan-to-value ratio restrictions on bank lending
''look to have cooled demand a little'' at the lower end of
the housing market.
''It may have been the case that potential sellers held off
for a few months to see how the market was impacted [by the
restrictions],'' Mr Smith said.
There should be some easing of supply constraints as a result
of increased construction activity this year, he said.
Last year the value of new building consents for residential
properties was up 28% at $7.9 billion, largely fuelled by
work in Auckland and Canterbury.
In Canterbury, he expected more housing supply to come to
market in 2014, Mr Smith said.
''In Auckland, the situation should also start to ease, but,
in the absence of continued strong increases in listings
numbers, only very gradually,'' he said.