More than 35 percent of homes listed for sale in Auckland are subsequently withdrawn from sale, along with Northland it has the highest rate of "delisting" in the country. Photo: 123rf.com
More than 35 percent of homes listed for sale in Auckland and Northland are subsequently withdrawn from sale, one economist says. The regions have the highest rates of "delisting" in the country.
Ed McKnight, economist at Opes Partners, ran numbers based on listings and sales data to create the estimate.
He took the number of properties listed in a month, compared to the number sold and the overall number of houses listed for sale.
He said it showed that Northland agents were particularly struggling. Over the six months to March, they listed 2128 properties for sale but delisted about 969.
"That suggests over 45 percent of properties listed for sale are eventually pulled from the market."
In Auckland, delists were more than 35 percent.
"Wellington, by comparison, is going strong. Over the same period 3633 properties were listed for sale and only 375 were delisted. That suggests that around 10 percent of properties that come on to the market are delisted... Whereas only 55 percent of properties coming to market in Northland eventually sell at the moment."
McKnight said, with the exception of Auckland, the regions with higher selling rates tended to be larger - Wellington, Otago and Canterbury.
"The trouble with Northland is that it is a very large area geographically. So rather than one large market it is a collection of many small property markets with small buyer pools. That can contribute to large swings where the market is either very quiet or very busy," he said.
"The Auckland market is surprisingly weak at the moment. Part of this will be today's high interest rates. Because mortgages tend to be larger in Auckland - since house prices are more expensive - that can contribute to buyers being more cautious."
Vanessa Williams, general manager at Realestate.co.nz, said it was hard to get clear data on the number of properties being removed without a sale.
She said properties would sell at different speeds and sales and listings data would not always line up. McKnight said that should not affect the overall picture.
"We are seeing quite a significant increase in stock," Williams said. "We're back to 'normal' levels of listings but what the difference is, is how long it's taking for properties to sell at the moment."
Her data showed the average time a property that was later withdrawn was listed on the site this year was 99.97 days, compared to 105.88 last year. But increases were recorded for lifestyle properties, sections and studios. That covers properties withdrawn between March and May in each year.
She said agents reported having to work harder to get vendor expectations back to where the market was.
Sometimes people would list their property for more than the market was willing to pay, and then decide to drop the price once a bit of time had passed.
"They've lost the first six weeks of the property coming on, through vendor expectations. I'm hearing a lot of that. Agents are telling me they are getting stuff sold ... when vendors are more realistic."
Property commentator Andrew Duncan said a typical real estate agent's agreement was 90 days and if a place did not sell in that time, owners would often withdraw and have a break before they tried another salesperson. "Or they just decide to wait and try again at a later date."
Sometimes people might be under financial pressure, he said. If they had to move they might decide to rent a place out rather than leave it empty.
Whangārei real estate salesperson Paul Sumich recently withdrew a listing from the market because it is in a coastal spot and unlikely to appeal as much in the winter months.
"You do tend to see this during the winter months, especially waterfront properties, they really are standouts in spring and summer but if people have been on the market over summer and haven't got a result, they tend to rest over the winter months and come back at spring time."
He said there did not seem to be more properties withdrawn this year than in the past, but there were some factors affecting the market. "There is still a hangover of higher expectations from sellers."
He said sometimes, particularly in areas where there were not a lot of sales, people might hold on to comparisons of deals done when interest rates were at their lowest.
"You remember what your neighbour sold for and you're now thinking you'll get the same but the market is different."
Whether properties were withdrawn would depend on the sellers' circumstances, he said. "If they've taken a job in a different part of the country or overseas and they're definitely moving and need the sale to be able to buy where they move to, they're more likely to stick it out and stay in the market."
When people wanted to sell but did not have to, they were more likely to take a break, he said.
He said people should talk to agents before they put their property on the market to get a sense of what it would be like. "That's going to lead to a better result."
Another agent, Brooke Gibson, said some vendors had unrealistic expectations. "Lots of homeowners think their home is worth a lot more than it is so they take it off the market."
Trade Me said the median days properties were listed on its site increased to 68 days for May, which was an increase of six days from April.
The longest-standing listing appeared to be a former petrol station in Hunterville, listed in August last year.