It’s stable and steady as she goes in the Auckland property market at the moment with a few quirky trends happening as we wrap up the mid-winter season. In terms of popularity, it’s usually the three-bedroom starter home that first home buyers and investors snap up first, but we’ve seen a shift, with a noticeable rise in popularity for one and two-bedroom homes.
The main reasons for this are those downsizing – especially baby boomers – or those wanting to get a foot on the Auckland property market, which means that a smaller property is often the option within reach. First home buyers are definitely back in the game and during open home viewing for properties under $700,000, they are the dominant demographic.
Lower listing numbers are the norm for this time of year, which not surprisingly is leading to lower sales volumes. The lead up to school holidays and the wet weather were also contributors to lesser sales numbers.
As Bindi Norwell, Chief Executive at REINZ, puts it so eloquently, “While Jack Frost may have got his icy grip on sales volumes, he has not been able to extend this to prices.” Indeed, while Auckland’s median price decreased slightly it continues to sit at a high $850,000.
If you’re thinking of selling, our advice is the same as ever. Well-marketed and well-presented homes are selling quickly. We’re also finding that a priced strategy is leading to excellent results in the current market as it quickly gains interest from buyers with a guide as to price.
Source: REINZ July 2018
The last few years have seen considerable halts on lending due to harsher LVR lending restrictions, which has led to many buyers needing to save harder and longer to get into their home. The good news is the lending rules have helped people’s ultimate goal, which of course is getting as much equity in their home as possible. Whether it’s to embark on the next stage in their homeowner journey, purchase an investment or even sell to fund their retirement, growing the percentage of equity you have in a property is crucial.
Plus of course, the more equity you have in your property, the less vulnerable you are if there are is a housing market bust, interest rates rise, or you reduce your income.
According to a report released this month by The Reserve Bank, Kiwi homeowners’ equity is on the rise. The report found that before LVRs were introduced in 2013, the average new mortgage was for 67% of a property’s value. But by mid-2016, the average LVR had fallen to 55%.
The report does exclude lending to investors but includes the substantial percentage of home buyers who are purchasing their first home or moving up the ladder.
This finding signifies benefits both for borrowers and the banks lending them the money, which of course has a flow on effect to the economy.
And while LVR rules are certainly one part of the equity equation, Auckland’s rising property values have also contributed to increasing the average equity of those moving.
In a season where the housing market can seem bleaker, it’s good news all round if you are a home owner and have some built-up equity in your property.