Auckland Vacancy Levels Continue High

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This excellent blog will give you hard information as to the state of the property market, and its rental statistics are a good guideline as to the state of the letting market. Below you can see that an increase in investor purchases has increased Auckland rental supply and kept a lid on prices and increased vacancy levels over the past year.

Auckland rental market continues to trundle along with an excess of supply over demand.   Other commentators have hinted there may be a lot of speculative investor activity driving the market, these stats certainly provide support for that thesis.  The opposite is true in Wellington, where vacancies are trundling along at a squeak under normal seasonal levels.

The chart below shows seasonal vacancy levels compared to the average of the last 4 years.  2009 was just after the global slump and had exceptionally high vacancy levels.  For the last 3 years listings fell to a very tight level in 2011 when we heard of queues for rentals to last year with 10% above the average.   From the beginning of this year however, listings grew to over 20% higher than historical levels.

The sharp variations are due to the averaging process, when I get time I will improve the methodology.  At present it is a simple average of the 4 days before and after the specific date, over the previous 4 years – 2009 – 2012

AK Urban2

With this many vacancies in Auckland, investors are in for a shock if there place is not better than others.  A correction has to be not far away, new investors will not be able to hold out with long vacancy waits.

Wellington market is sitting at almost normal levels after dropping from an unexpected high over last summer.  Note that this chart shows the difference from normal seasonal levels, so 40% above normal in summer is an exceptionally high number because summer listings are higher than winter.  On 9th January, listings in Wellington totalled 2269, the average for the previous 4 years at this time was1533, showing increasing vacancies every summer over the five years.

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