A lack of listings is limiting Napier house sales potential

After a strong month in May house sales in Napier eased back to 83 in June, a level which is 9% below the 10 year average. During the past year the sales turnover has improved by over 3%.

Since February 2015 the gap between the benchmark 10 year average monthly turnover has narrowed, which indicates a recovery in demand, which was relatively sluggish over the past 18 months. This stronger growth could be attributed to the lifting of the LVR speed limit to 15% (outside Auckland) coupled with lower interest rates. Further interest rate cuts are expected.

A lack of listings is limiting Napier house sales potential in the months ahead. According to data from realestate.co.nz, listings have been lower than a year earlier for each of the last nine consecutive months.

HomeStart subsidy and larger Kiwisaver withdrawals for first home purchasers since April 2015 has increased activity below $300,000. Investors from outside the region have also increased the demand for more affordably priced homes. However, softening lending constraints and further easing in interest rates has also benefitted sellers in higher price brackets.

Overall prices have only shown marginal improvements, with the latest monthly price index from Quotable Value showing that current prices are on average 1.6% higher than a year earlier.

The quarterly price index shows that at current levels prices are within 2% of the 2007/2008 market peak.

The measure for the average days to remains high at around 8 weeks in June, probably because a number of the properties which sold during the month had been for sale for an extended period of time.

Properties that are located in popular areas, are well-presented and correctly priced are attracting the most interest, often receiving multiple offers and selling for above average prices.