Much of the country battled wild weather during April, but in the property market the outlook was far more stable. Not surprisingly in a month packed with school holidays, Anzac Day and Easter, sales volumes dropped in the Auckland market; a 33% decrease across the region compared to March.
The unpredictable weather also exerted a strong influence on the market. REINZ Chief Executive, Bindi Norwell, says: “The data for April shows that the market is reasonably stable, despite the impact of a number of factors on activity right across New Zealand. These include severe weather in April….anecdotal evidence suggests that in some regions this was the dominant feature of the month.”
April certainly didn’t dampen prices, as the median price rose by 3% (+24,000) compared to March, with a 20% increase in Papakura (and no drop in sales volume), demonstrating the city’s continual radial move to its boundaries.
Coming into winter, the good news for buyers is that housing availability remains strong. There are now 19 weeks of supply in the Auckland region, an increase of around 2,500 properties for sale compared to a year ago.
We urge vendors who may be scared off by the winter market to come and chat to us. We’re experienced in selling houses whatever the weather, and with continuing strong buyer demand, with some urgency behind it to lock down an interest rate before any more rises, take this opportunity to capitalise on an eager pool of purchasers.
Source: REINZ Monthly Property Report May 2017
Since this current cycle of the housing boom started, industry experts and property commentators have been at loggerheads over the reasons for the leaping values witnessed over the past few years. Whether it’s low interest rates, migration or baby boomers investing for their retirement, it all boils down to the age old balance of supply and demand. With demand outstripping supply, the pendulum leads to rising prices.
The Government has just announced a Crown land building solution that will see tens of thousands of new houses built in Auckland over the next decade. This ambitious programme will replace 8,300 rundown houses with 34,000 brand new purpose-built homes over 10 years. Although social houses are part of this promise, in a decade we’ll have enjoyed 20,600 new affordable and market homes. This equates to the equivalent of 3.5 new houses on every street across Auckland. The Government has stated that this substantial redevelopment and construction programme is on a scale not seen since the 1950s.
So, will this stop the runaway housing market? And will the houses actually be built? Funds have been sourced, builders have already taken up their tools and are onsite getting on with it. This can’t come at a better time for frustrated Aucklanders, many of whom were shocked with the recent findings of the Housing Affordability Index, which shows that 64% of Auckland renters would be locked out of the current market. These findings instigated many water cooler conversations in offices around the city about how people could never afford their own home. As with all statistics, there are some things to be aware of. The index doesn’t take into account the time it takes to save a deposit, plus it assumes that renters will buy in the area they are currently renting in, which is not usually the case.
The truth is that prices in Auckland have priced people out of the market. And while 34,000 homes seems like a massive influx of homes, remember that we are currently 40,000 houses short in this city, not taking into account the continued popularity of the City of Sails to live and work. The homes will be drip fed onto the market, or used for social housing, over the next ten years, so the pendulum of supply and demand continues to move. And the Kiwi love affair with property looks set to continue.