The housing market appears to be finishing the year in a slightly precarious position, with a mountain of unsold stock building up. This could carry through to the new year, putting downward pressure on prices over the peak selling months.
October and November saw a surge of properties coming onto the market, with property website Realestate.co.nz receiving more than 12,000 new residential listings in each of those months.
That pushed the total stock available for sale on the website up past 33,000 at the end of both months, meaning the number of properties on the market was at an 11-year high for the time of year at the end of November.
However, that rush of listings and build up of stock was not matched by a burst of sales. In fact November’s housing sales were downright disappointing with the REINZ reporting a decrease in sales in November compared to October, something REINZ Chief Executive Lizzy Ryley pointed out had only occurred six times in the last 33 years.
That combination of high levels of new listings and increasing total stock, combined with disappointing sales numbers, has pushed up the overhang of unsold properties.
The overhang is the number of properties that have been on the market for at least a month, meaning they will usually have completed a full marketing programme, but remain unsold.
Interest.co.nz estimates the overhang of unsold properties passed 26,000 at the end of November. That’s up 4.8% compared to the same time last year, and up by 37.2% compared to the end of November 2023.
The overhang of unsold properties was also the biggest its has been at the end of November since 2014.
That is a lot of stock to try and move, even before any further new listings come onto the market, and of course December is a short month.
In about a week or so real estate agents will start hanging up their business attire and getting out their beach gear as the market all but closes shop until at least mid-January, and things won’t get properly back into full swing until February.
So vendors who are still sitting on unsold properties will be facing some tough decisions.
While it’s possible we could see a late frenzy of buying activity before Christmas to reduce the mountain of unsold stock, it’s more likely there will be a substantial carryover of unsold properties onto the market in January, just as a fresh wave of vendors start listing their properties for sale as we head into the peak summer selling season.
If that’s the case, high stock levels will likely weigh on prices when the market kicks off again in 2026, meaning vendors will need to be realistic in their price expectations.
Potential buyers on the other hand will likely have so much choice they’ll be as happy as a pig in mud.
Oink oink!
