ANZ monitors two simple guages to highlight supply-demand balance within the property market, and across the regions.
The ratio of consents (supply) to economic growth within a region. If consents are growing faster than demand growth within the region, it is indicative of excess supply, and of course the converse applies.
The ratio of house sales to consents. Another supply and demand balance measure, with an up-tick in the ratio indicating excess demand, and a fall below trend suggesting a supply glut pending.
Across the regions, they note the following:
Auckland and Wellington are the national hot-spots showing clear excess demand relative to supply. In both regions, the ratio of consents to GDP has fallen below trend (too little supply), while the ratio of sales to consents has been trending up (solid demand).
Our supply-demand indicators are broadly in balance when looking at Northland, Waikato and Canterbury.
The majority of regions are now showing early signs of a market that is set to move in the favour of buyers. The ratio of consents to GDP has been trending up in Gisborne, Taranaki, Hawke's Bay and Manawatu. In these same regions, the ratio of house sales to consents has fallen below the historical average.