Buyer’s market is almost gone
At the end of my column last month I posed the question of how long it would take for the large queue of buyers who have been holding off purchasing since early-2021 to re-enter the market. The best measure will probably be monthly sales data from REINZ and although sales have improved 19% seasonally adjusted over the past three months, volumes are still low. The great queue has yet to get moving.
However, I can see clearly from my monthly survey of real estate agents undertaken with REINZ that there are more people getting out and investigating what the market has to offer, motivated by changes in quite a few things.
On average since the middle of 2020 a net 7% of real estate agents responding in my survey have said that they are seeing fewer people showing up at open homes. The latest reading is a net 42% saying that they are seeing more people. This is up from 32% late in May and just 3% in April. Physical property perusals have markedly picked up in a short period of time.
Are people actually buying more? The sales data tell us yes, as do the results to a question I ask agents about auction attendance. On average a net 14% have said they are seeing fewer people at auctions since I started my survey. Now, a net 19% are seeing more. This is a distinct change from only a net 2% seeing more late in May and a net 18% seeing fewer people in the auction rooms at the end of April.
I have previously emphasised the factors which I expect to drive increased numbers of people entering the housing market and from my surveys I can see evidence of these factors coming into play. For instance, I ask agents what the things are which most concern buyers. 34% have just said buyers are worried about a shortage of listings.
I have discussed how listing numbers between December and May fell by 13% and buyers are starting to see this trend. Maybe they are also observing the historical tendency for the stock of listings to fall as sales rise coming into play. The 34% result compares with only 14% of agents at the end of April saying listings are a major buyer concern.
What about prices? Are people still worried about them falling? Yes. 38% of agents say such worries exist. But this is the lowest such reading since the end of November 2021 when the credit crunch struck. This is now below the average reading for the past three years of 44%. I also ask agents what the factors are which motivate investors. 18% have just said expectations of prices rising. This is up from levels of 2% - 8% since January 2022.
For the moment buyers can still pick and choose from a good range of properties on the market. But the clock is ticking for this buyer’s market. In fact, only a net 7% of agents now say we are in a buyer’s market. This is down from 29% at the end of May and 49% at the end of November last year. We are almost in a seller’s market again for the first time since November 2021.
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