Low volumes, yet favourable conditions
By General Manager – Robert Carter BBS
There is a myriad of factors influencing New Zealand’s property market resulting in varied market performance. 14 of the 16 regions in New Zealand experienced annual increases in median prices for residential sales, some with records being broken. Auckland & Canterbury markets have seen decreases in both prices & volumes.
Looking specifically at Auckland’s North Shore market, in January there were 152 sales according to REINZ, the lowest monthly sales volume in over 20 years! The North Shore City median price in January 2019 was $920,000, down 13.2% from $1,060,000 in January 2018.
There continues to be a multitude of factors providing confidence in the market. Overall a positive economy with strong population growth, an ongoing housing shortage and record low interest rates. Not to forgot being a very desirable city to live in! On the contrary, factors potentially contributing towards the slowing volumes are reserve banks LVR restrictions, foreign buyer policy, anti-money laundering legislation along with increased requirements for landlords, and a potential capital gains resulting in cautious investor activity.
Heading into February & March when the market typically gains momentum, we are seeing a notable increase in properties coming to the market and buyer activity is high. We will have a better indication of the year ahead this time next month, but in the meantime, it appears positive and a great time to be buying & selling in fair market conditions.
The Perfect Plateau
December statistics provided further confirmation that the housing market has cooled. At the same time there is an apparent calm about the market. With confidence that whilst volumes are low, and prices have corrected slightly the market remains stable and this recent correction may well have prevented something more drastic happening to the property market.
North Shore sales volumes in December were the lowest since the 2008 GFC. There were 213 North Shore sales in December 2018 compared to 278 in December 2017. 2017 and 2018 annual trading volumes were relatively similar, with 2018 volumes 4.6% lower than the prior year.
Median prices on the North Shore also saw a decline of 11.6% to $980,000 when compared to December 2017.
Days on the market have crept up sitting at a median of 40 in December.
There is an eclectic combination of factors contributing to the current market, ultimately producing an element of more than usual choosing to ‘wait & see’. The current market is producing great opportunities for buyers and we have experienced a marked increase of first home buyers. Some of the factors influencing the current market are the introduction of the new Overseas Investment Act, the declines in the Australian property market and potential Capital Gains Tax for investors. On the contrary Auckland has a housing & rental property shortage, low interest rates and not to forget ‘the North Shore is a great place to live’!
All in all we predict an interesting year and a stable market. There will be a necessity for those vendors looking to move on to ‘meet the market’ as it turns slightly in favour of buyers. It will be a year where choosing to align with the best available property experts will be rewarded.
Confidence & comfort in market heading towards Christmas
In the final run to Christmas, the North Shore market continues to show consistent, fair trading and is well poised heading into 2019.
North Shore’s median sales price continues to hover around the $1M level. November 18 had the highest median price in 8 months of $1,041,000 although still down 2.2% on November 2017 median of $1,064,500.
There were 313 sales on the North Shore in Nov 18 compared to 309 in the same period last year. Whilst these sales volumes have been relatively consistent over the past 2 years, they are historically low. Putting into context the average volume of sales on the North Shore in a November across the past 12 years was 451. Days on the market remain relatively low at 37.
Nationally, strong growth in the regions resulted in another record median house price of $575,000 in November, up from $540,000 at the same time last year.
On the 1st January 2019, changes to the Anti-Money Laundering and Countering Financing of Terrorism Act take effect for Real Estate which will require customer due diligence at the time of listing, with extra requirements for properties owned by Trusts or Companies.
Market conditions providing fair trading, comfort & opportunities for both buyers & sellers.
Best wishes for a very Merry Christmas & a prosperous 2019
Spring Boost for North Shore Market
In October we saw a boost to the North Shore real estate market with the highest sales volumes in 5 months and the highest median sales price in 4 months. September sales were somewhat restricted due the shortage of available listings, however following an increase in September listings we have seen the flow through effect of higher sales with prices remaining stable. Listing volumes continue to remain strong and we anticipate strong trading through to Christmas.
The North Shore median price in October was $1,000,000, up slightly on $990,500 in September but down from $1,056,000 in October 2017. It seems prices may have found their happy median for the time being with prices fluctuating around $1,000,000 for the past 12 months.
There were 321 sales on the North Shore in Oct 18 up 10% on the same time last year. Days on the market remained relatively low at 36 – the lowest since December 2017.
It should be noted that last year’s sales volumes were impacted by the election. October also saw the introduction of the foreign buyer ban. From 12th December 2018 The Residential Tenancies Amendment Bill prohibits letting fees being charged to tenants. On the 1st January Real Estate changes to the Anti-Money Laundering and Countering Financing of Terrorism Act take effect for Real Estate.
Primary indicators continue to point towards an active, sustainable & stable market. A renewed confidence was demonstrated by buyers fuelled by an increase in available listings and the traditional spring lift providing great opportunities for buyers & sellers.