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Encouraging sales results give short term confidence

By Daniel Horrobin

The halfway point in the year has rolled round – and what a year it’s been. Our City Apartments & Wynyard Quarter team not only saw a strong increase in the total number of sales throughout June, we achieved a record month of sales when compared to the last 12 months which was encouraging. However, we do remain cautious of how things may transpire in the coming months as new listing numbers are tipped to soften and banks remain reserved on lending. 

Meanwhile, the heightened level of buyer activity has been driving strong competition, rewarding our sellers who have opted to go to the market now and capitalise on the current climate. And we’re seeing a good spread of interest and demand in the high-end owner-occupied market as well as the investment sector, which continues to revive itself. Fueled predominantly by the current record-low interest rates, investors are seeking a minimum net return of 5% and above which in many instances, they’re getting. Whilst we are seeing record low rates on offer, the major banks have certainly tightened up on the lending criteria with buyers being extensively stress tested to gauge their serviceability of loans should we see interest rates start to climb. 

On the rental front, our SuperCity Rentals team has been monitoring the rental market closely, and they’ve found that there’s not a huge difference in the already inflated number of available apartments to rent and that rents are holding up well compared to the previous couple of weeks. Overall, there’s certainly glimmers of hope as Auckland’s property market finds its feet again. 

So if you want to buy, sell or invest in city apartments, get in touch with us today.

Property market recovering, but September will be the true test –

New Zealand’s lockdown measures created an initial, brutal hit on the economy. But the success of those measures meant a recovery into a virus-free community. As a result many businesses say they’ve been able to recover the lost ground faster than they thought they would.

Property is no exception. But it’s bouncing back faster than many in the industry had feared, and there are hopes that recovery will only pick up pace. The June REINZ Residential Market Confidence Report shows May sales climbing back up to 1300 sold a week. That’s a far cry from the 227 sold a week in the worst of lockdown, even if it’s still down from last year’s 1700 sold each week of May. This is a faster recovery than we saw after the Global Financial Crisis in 2008.

REINZ CEO Bindi Norwell said the data was heartening to many in the industry.”I think it’s much better than people had expected. At the moment we’ve got a lot of wage subsidies, we’ve got mortgage holidays. “So in essence, we’ve had some buffering of the market.” In that explanation, you also see there’s reason for that optimism to remain cautious. 

September will be an important month by anyone’s measure, because of three key factors.

  • The election, of course, happens then, which has typically been an uncertain time that buyers and sellers like to wait out to see who wins.

    The wage subsidy will end, and Prime Minister Jacinda Ardern has ruled out extending it.

    House prices are closely tied to unemployment, and if people start losing their jobs without wage support, then some will be forced to sell under pressure.

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