Property market 'sluggish'

Photo / Herald on Sunday

The NZ property market continues to be in a "dormant" phase, according to a monthly report from realestate.co.nz.

Fewer new listings are coming on to the market, and sales are subdued, the report says.

While the sales figures show year-on-year growth, they are still lagging behind historical averages.

Total sales for 2009 were just 69,000 - up from the 2008 level of 56,000 - but far from the mid-2000s levels of around 100,000.

January saw just over 10,000 new listings coming onto the market; the first time in four years that the January figure has been lower than December.

The start of the new year traditionally shows a strong lift in listings which seek to benefit from summer activity in the market. The 2010 year started with a two per cent decline in new listings.

However, despite this signal of lower listings, the trend is not as might have been expected towards a strong sellers' market.

The level of inventory of unsold homes on the market rose significantly in January to 40 weeks from the 34 weeks in December. This measure reflects the rate of sales which is running at a slower rate and therefore failing to clear inventory.

Supporting this position of a sluggish property market is the measure of asking price expectations which fell for the second month in a row from $412,319 in December to $405,040 in January.

This is a sign of a market where sellers are asking realistic prices so that their property stands out in what is becoming a somewhat crowded market, says realestate.co.nz.