The Auckland property market is always under scrutiny and never more so than during a pre-election period. The good news is that compared to last month the market is stable and prices are on the rise. House prices in the City of Sails increased by $10,000 from July, with most of the activity driven by school zones, age of homes and location.
Sales volumes were also higher month-on-month with a 7 percent increase in the Auckland region and a large boost in Manukau, where sales were up a substantial 24 percent.
If we rewind back a year, both sales numbers and prices are down slightly, but this certainly isn’t a reason to forecast doom and gloom, it’s simply the market correcting itself back into a more balanced state. Real estate agents can finally get some sleep and home buyers don’t have to rush to place offers at the first open home. For some vendors, there are some adjustments in mindsets needed in relation to price expectations, particularly with overseas owners who may still believe that prices are still catapulting ahead at an Olympic pace. In saying that, well-presented homes in good areas, with a realistic market price will continue to sell.
LVRs and the banks’ lending rules are still impacting the market; leading investors to be more cautious, especially ahead of the election and the potential effect of a Labour win. However, the market is in a healthy position to pick up again as we move into Spring and the election drama is over.
Source: REINZ, September 2017
Commentary on the property market this winter has been full of reasons why the boom times of 2015 have disappeared. Increased deposit requirements, tighter lending criteria and the resultant unaffordability from the recent boom have all played their part. Not to forget of course, the shadow of the election which always makes itself firmly felt in the property market.
The NZ Herald wanted to know what types of Auckland property buyers have been most affected by the changing times, so they analysed August’s buyer classification data, which links types of buyers to property types, locations and prices.
Despite mutterings that property investors have slowed down their purchasing, the Herald found that the uncertain political environment is actually having more influence on potential movers.
Only 21.7 percent of Auckland sales in August went to people moving between homes, while the share of sales to multiple property owners remains relatively flat at 41.9 percent. Yet, it’s when you look at data relating to first home buyers that some surprising results become evident. As property commentator, Nick Goodall, says: “The group that's so often the focus when discussing affordability appears to be doing more than okay. They're responsible for 23.4 percent of sales in August, their highest share in almost four years.”
When you read such numbers as this, one might naturally assume that they are buying up small one-bedroom city pads, but in fact throughout 2017, 73 percent of Auckland's first home buyers have selected houses. Apartments only make up around 5 percent of first home buyer purchases. When faced with a choice of a central location and a smaller floor area, those making their first step onto the property ladder are choosing to buy further from the CBD so they can have a slice of the Kiwi dream. That’s something we can all relate to and either strive for, or remember with fond memories.