As we edge our way out of winter and catch a glimpse of spring on the horizon, it appears that things are looking up for the Auckland city apartment market. With a considerable lift in both listings and sales compared to our June and July numbers, this month we have experienced a very positive picture, which has had a highly anticipated knock-on effect.
Not only has this activity increased buyer confidence and competition, we have also seen the rise of multiple offers on apartments for sale in Auckland, as well as pre-auction offers, and even auction dates being brought forward. This has resulted in an improvement in our auction clearance rate, which is currently sitting at 75% (up from circa 67%).
We’re also thrilled to see the revival of previously absent investors who are re-entering the market since the recent introduction of the LVR restrictions, which makes us really excited to see what happens in the Auckland city apartment market as we move into spring and beyond.
So, if you’ve been waiting in the wings to either buy, sell or invest in Auckland, it’s evident now is the time to act. Whether you’re looking for new, luxury or studio apartments for sale in Auckland, we have a whole host of opportunities in sought-after locations, including the Viaduct harbour and Wynyard Quarter as well as a very active database of pre-approved buyers eagerly waiting to enter the apartment market. Just give us a call and we’ll see how we can help.
New data from the Real Estate Institute of New Zealand shows sales volumes for July were up on the year before. In fact they were the highest July figures since 2016.
Does that mean the market is picking up again, especially in Auckland, where prices have been flat for the last two years and sales volumes have been decreasing? Many of the headlines when it comes to housing market in New Zealand tend to focus on prices – are they up or are they down?
The REINZ figures released this week do show some price movements outside of Auckland – the national median price, excluding Auckland, was up 6.5 per cent to $485,000 – but in a changing market the stat to watch, according to the experts, is the number of sales. National sales volumes rose 3.7 percent year on year to 6118 while in Auckland volumes were up 6.6 percent to 1894. “This has gradually been getting stronger over the past three months,” says Bindi Norwell, REINZ chief executive. “This is the first time in eight months we’ve seen increase on an annual basis, suggesting that we’re starting to see some early signs of growth.”
The clue is in the inventory of properties available for sale, up by 555 properties or 2.6 percent to 21,843 nationwide. Importantly, new listings make up one third of that inventory nationally, slightly less in Auckland (29 percent): that’s slightly less than this time last year, but Norwell says it shows vendors are coming around to the “new normal.”
But a harbinger of shifts in the market is the drop in properties selling below $500,000, the typical first home buyer bracket. That share dropped to under 40 percent in July (from 42.4 percent last July). Norwell says that’s due to fewer properties available at that price point at the moment. “But prices are coming down, as we’re building more in that price bracket. Apartments, for example, were only nine percent of the pool three years ago, and that’s up to 12 percent now in Auckland.”
“I do feel that now vendors are meeting price expectations, that there’s a renewed confidence coming into the market,” Norwell says. “It’s all cyclical, and now we have a bit of movement, things are going ahead. With low interest rates, and August’s surprise 50 basis points drop in the OCR, going forward we expect to see even more signs of growth.”
ASB economists expect nationwide house price inflation to pick up from the current annual pace of around 1.5%, to 5-6% by mid next year. In ASB’s new Home Economics publication, senior economist Mike Jones says while there are plenty of “cross-currents” at play in NZ’s housing market, it’s ASB economists’ view, that sharp falls in mortgage interest rates will combine with still-strong population and labour income growth to “jump-start the Auckland housing market and add a little more heat to simmering regional markets”.
Even with the “jump start” though, the ASB’s only forecasting flat, IE 0% growth for Auckland prices next year – after a more than 3% drop expected this year.
Talking nationwide, Jones says from late 2020, they expect the price cycle “to top out as new housing supply coming on-stream gradually reduces the housing shortage”