Homeowners are holding back from putting their property on the market

Realestate.co.nz says the 8,143 new listings last month was the smallest number for a February since data collection began and a 29.5% drop on the number of listings in the same month last year.

Realestate.co.nz spokeswoman Vanessa Williams says is typically a busy time for home sellers, but the challenges many Kiwis faced over the past month would have had an impact.

In Auckland new listings dropped by 36.9% over the year to the end of February, with the city affected by severe floods in late January and then by Cyclone Gabrielle.

In Hawkes Bay and Gisborne, which bore the brunt of the cyclone new listings were down annually by 43.5% and 54.4% respectively.

Northland and Coromandel were also hard hit by the  weather and had falls of 31.9% and 37.6% in new listings.

However, the drop in new listings was a national trend, apart from Nelson & Bays where new listings were up 7%.

At the same time, there were 29,083 homes on the market nationwide last month, an increase of 25% on the same time last year.

Across the country the number of homes for sale was up in nearly all regions, with Coromandel, up 123.9%, and Nelson & Bays, up 99.8%. Stock in most regions was up by more than 20%.

Wellington bucked the trend, with the number of homes on the market down by 9.8% annually. Williams says that suggests stock is starting to move. It is the first time Wellington has had a decline in annual stock since August 2021.

In Auckland, the number of homes on the market in February was up by just 4.1% on last year.

Realestate.co.nz’s data also show the average national asking price was down 0.8% to $880,092, from $889,036 in January. It has dropped 11.1% from $989,511 the same month last year.

Housing supply

Meanwhile the ANZ’s latest Property Focus report says it believes the housing shortage looks gone.

ANZ chief economist Sharon Zollner says while there are a lot of assumptions required to make a housing deficit/surplus calculation, meaning the error band is wide (tens of thousands of houses wide), for what it’s worth, things looked pretty square at the end of last year.

“We estimate a housing deficit of around 75,000 houses emerged between late 2012 and early 2020. Then, with the closed border dampening new demand and the building sector going gangbusters, the deficit that took around 7.5 years to build up looks to have been fully eroded in less than the three years to December 2022.”

She says in other words, it looks like 2023 kicked off without an undersupply of houses – for the first time in about 10 years.

However, this part of the fundamentals story may well be about to change.

Zollner says net migration, if you believe the latest data, is picking up strongly, adding to new demand at a faster pace than supply growth, meaning we could soon be back in housing deficit territory.