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Auckland Apartment Report – August 2023

By Daniel Horrobin

Two steps forward – One back BUT heading in the right direction.

Mixed messages in the housing market are likely to confuse the public, reports Director of City Realty Group, Daniel Horrobin.

On the one hand, positive reports about demand outstripping supply appeared in the NZ Herald One Roof on 4 July 2023:

“Demand finally outstripping supply”

A sharp drop in new listings volumes in some of the country’s biggest housing markets could be an opportunity for vendors.

However, the listings drought comes at a time when sales activity is picking up and auction rooms in Auckland and Christchurch are busier. 

OneRoof is also increasingly hearing from agents that buyer demand is currently outstripping supply”.

A West Auckland Agent was quoted “Prices in general haven’t gone up, but people have started to make decisions”.

Likewise, Daniel reports positive activity from Ray White’s Sandringham office Auction Room in mid July. “I arrived at our Sandringham office Auction Room and couldn’t find a seat…

One auction, with eight registered bidders and five active bidders,which sold under the hammer”.

And Stuff reported more positive news for the housing market on 31 July 2023: 

Months of falling house prices are coming to an end and factors are building to support the market according to one of the world’s largest banks.HSBC economist Jamie Culling.

The ‘one step back’ has been seen by banks providing a mixed message through their actions. Daniel says “Just when the market is showing signs of bouncing back, four major banks moved to lift their home loan rates, heaping more pressure on mortgage holders”.

“However”, continues Daniel “there will be heightened interest in the upcoming election, fast approaching, with National this month announcing their intention if elected to:

  • Restore full interest deductibility for rental properties
  • Take the bright-line test back to two years (from 10)
  • Reintroduce 90 day notice periods for tenants and
  • Change the automatic roll-over of fixed-term tenancies into periodic tenancies

Daniel says: “This is not necessarily good news for first-home buyers but should a National-led government follow through, it will certainly restore investor confidence in the property market in general and specifically our CBD apartment market. It will also assist with the supply of available rental stock, which is so badly needed.”

In terms of rentals, landlords are asking tenants to pay $50 more a week on average than last year, with the national median rent on Trade Me up 9% annually in June. Rents in Auckland were up 11.7% annually to a median of $670. Nationwide, the number of properties listed for rent was down 19% in June, from the same time last year, while demand was up 35%. Migration has upped demand for city apartment rentals.

Overall, despite banks increasing interest rates, there are positive signs the city apartment market and the wider housing market is moving in the right direction. 

Daniel has some final advice for those wanting to sell but waiting.

“The number of properties for sale in the central city has dipped below 500 for the first time in recent memory. That will change, and fast. With spring around the corner and buyer activity building, waiting may mean you are competing with a legion of vendors who waited just like you”.

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