Ray White Now New Zealand - October Edition - Page 25

Housing Supply
It has been said for many years that New Zealand simply hasn ’ t been building enough houses . While development has ramped significantly up in recent months , this construction can take many months or years to complete , meaning that the immediate demand remains unsatisfied . Compounding this issue are the delays to construction that COVID related lockdowns have imposed . In addition , any vendor that had delayed putting their property on the market due to the outbreak also added to the shortage of available stock .
Cost of building
Due to many factors , including global supply chain issues , the closing of timber mills , labour shortages , and COVID related building delays , the actual cost of building a home has continued to increase . With the cost of new homes and renovations increasing , existing stock will continue to see upward pressure as it poses an immediately accessible alternative .
Pricing a property remains incredibly difficult at present . The rate of price growth over the last period has been immense . With family homes seeing surging demand , development opportunities being hotly contested and demand for residential rental properties remaining strong , it is no surprise that sellers are not risking underpricing their home when putting it on the market . By listing their property for sale by auction , they remove the price ceiling that could restrict the amount they receive for their home . Data from Ray White Pulse shows that despite prolonged restrictive trading conditions due to the latest COVID-19 outbreak , auction listing levels have remained above those seen last year and significantly above those seen during 2019 as shown below .
# Scheduled Auctions / 28 days
1,800 1,600 1,400 1,200 1,000 800 600 400 200
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
2019 2020 2021
Source : Ray White Online Analytics
It does remain difficult to predict what the market may look like in the future . There is no doubt increasing interest rates , prolonged lockdowns , and further economic uncertainty could have an adverse effect on prices in the medium to long term . Many experts say that conditions are very strong for those wishing to take advantage of the lower supply and increased demand right now .