Auckland Apartment Report – September 2024

When A Little Goes A Long Way

What we are referring to is, of course, the 14 August announcement by the Reserve Bank that the Official Cash Rate was being trimmed by .25 basis points down to 5.25, the first cut since March 2020.

Director of City Realty Group, Daniel Horrobin says: “It wasn’t so much the size of the cut that mattered, it was more the message the announcement sent around the country. As well as a change in mood, an additional benefit was the flurry of bank activity as they jostled to attract customers.”

On 19 August the NZ Herald reported: “Homeowners are continuing to see the benefit of the Reserve Bank’s recent interest rate cut and outlook as banks scramble to offer competitive mortgage lending rates. ANZ today announced the largest cuts to its home loan rates so far this year.”

By 29 August, NZ Herald OneRoof reported bank switching among mortgage holders hit an all time high.

OneRoof goes on to report: “Mortgage brokers believe New Zealand’s one-year rate could drop to 5% before the end of the year as competition among the major banks intensifies.”

Also on Monday 19 August Ray White Head Office reported: “The New Zealand property market experienced an uptick last week in auction clearance results nationally, demonstrating a strong finish to winter and optimism ahead of spring.”

Then to close out the month on 30 August the NZ Herald quoted: “The ANZ-Roy Morgan consumer confidence index rose this month. The five-point lift was disclosed a day after the bank said business confidence rose to the highest level in a decade.”

REINZ Chief Executive Jen Baird reported in August that July brought a new wave of buyer activity not typically seen in late winter.

In their August update, Realestate.co.nz reported: “The latest New Zealand property report shows an increase in buyer activity following the recent OCR drop – the first in four years. In the two weeks after the announcement, there was a noticeable rise in listing enquiries, suggesting renewed interest from buyers.” 

If ever those statements needed hard evidence, our City Realty Group Auctioneer Cameron Brain was delighted with the turnout at an early August auction conducted on-site at a suburban property by our Wynyard Quarter Team. “I counted 60 people in the lounge room, spilling out onto a backyard deck, nine registered bidders and the property sold under the hammer. I haven’t seen those numbers for three odd years.” he declared.

Daniel says: “Back on the Auckland Central sales floor, August was steady as we head into spring with considerable optimism for what the rest of the year will bring.” 

“As we indicated last month, stock is still a challenge with the total number of central city apartments for sale on Trade Me remaining stubbornly modest.”

“Open home buyer visits were down in August compared to July,” continues Daniel, “but there was a notable sting in the tail. Over the last weekend of August including Sunday 1 September, we met more than half the open home visitors we had encountered over the previous four weekends of the month. Hopefully another positive indicator of things to come.”

In the rental space, a wider view supports what we are seeing in the central city. As a result of a Tony Alexander survey in August: “This month a record net 21% of landlords reported that finding good tenants was difficult. Only five months ago a strong net 27% said finding good tenants was easy. The rental market has turned on a dime as the unusual migration boom rapidly fades.”

“Overall,” says Daniel, “there appears to be a general upswing in inquiry which augurs well for what lies in store for the warmer months ahead.”