Monthly Market Update | October 2019
A resurgence of energy & activity for the North Shore and North West market
The built-up demand as a result of the shortage of listings has been producing some remarkable results across all sectors of the market.
A favourable combination of market factors is fuelling the confidence of buyers. The cancellation of capital gains tax combined with tumbling interest rates has assisted with reigniting the market.
Sales volumes remain low when compared to long term averages with 318 North Shore sales in October.
For now, prices are holding steady, yet many are predicting rises on the horizon.
It is going to be a busy run of sales through to the end of the year presenting opportunities for buyers & sellers.
– Robert Carter
Spring enthusiasm despite supressed volumes
There has been a notable ‘bounce in the step’ of the North Shore market with good properties commanding strong interest. Stories of multiple offers, competitive bidding, increased auction success rates & quick sales frequenting the real estate airwaves.
However, sales volumes remain suppressed. Whilst in September both the New Zealand & Auckland market saw volume increases from last year, the North Shore market volumes remain at some of the lowest this century as presented on the graph below, with just 242 sales.
The pendulum of market forces is swinging favourably for the real estate market with low interest rates, abolished capital gains tax, housing shortage, and increased buyer confidence. There is also growing acceptance of recent changes to legislation with the Overseas Investment Act, Brightline Test change, Anti-money laundering & Residential Tenancies Act.
The North Shore median price has remained stable at $990,000 in September.
All in all, a solid start to Spring, key indicators pointing towards a stable market with momentum building despite the lack of availability of quality listings restricting sales volumes.
A market of two halves
Robert Carter – General Manger
The ‘tug of war’ between market forces remains, yet evidently, the surge of momentum strengthens entering the Spring market.
Determination & confidence from buyers is resulting in some outstanding sales with a notable increase in auction success rates & auctions brought forward.
However, sales volumes remain suppressed due to the lack of listings. With 260 North Shore sales in August, it was the second lowest August volumes this century, just ahead of 2008 during the Global Financial Crisis.
The North Shore median price has tracked upward consistently, albeit minimally for the past 5 months to reach $999,000 in August.
Although there has been a reduction in sales, the activity & confidence in the market is undoubtedly increasing entering the Spring market. Days on the market remain relatively consistent at 44, prices creeping upwards, buyer confidence increasing along with Auction success rates all providing reassurance around the current market. The shortage of current listings providing an opportune time to list and stand out with less competition in the market.
Momentum builds towards Spring
Robert Carter – General Manger
Market indicators continue to point towards confidence moving forward. In July North Shore prices remained steady and volumes increased. At Harcourts Cooper & Co, our monthly auction success rate increased to 68% with an average of 2.2 bidders per auction.
The recent reduction to a record low official cash rate has added to the confidence provided by the abolishment of a proposed capital gains tax.
Investors are making their way back into the market along with increased demand from first home buyers.
Whilst we have seen a 13% increase in the number of CCC’s issued this year compared to the prior year, Auckland continues to have a housing shortage as a result of the accumulated shortfall in housing that built up due to many years of under building.
It’s like a game of 2 halves with current listings. Key factors for achieving a successful sale are the marketing & promotion, price expectations & sales method, the presentation of the property and agent & agency representing the owner. When the aforementioned factors are favourably combined, we are typically achieving great results. However, if a property has one or more of these not effectively managed or additional obstacle/s for buyers to overcome it is sometimes resulting in the property taking longer to sell.
With Spring just around the corner, signs are positive for an active market with opportunities for the astute.