For the second month running, we saw buyer demand continue to exceed the number of new listings coming to the market with our sales volume up 55 per cent in May 2021. Whilst encouraging figures, we must not lose sight of the overshadowed month that May 2020 was. While we were still operating under restrictions that allowed just two private viewings per day, there was an unpredicted energy in the market that followed.
Despite this lively buyer activity and competition being created among both investors and owner occupiers, we have noticed a shift in buyer expectations as many have started to take a stronger stance under negotiations. This shift is a direct result of the recent New Zealand Government policy change, posing further challenges for investors . As a result of this, we have seen some sellers realign their price expectations in order to secure a successful sale.
Auctions continue to be a very effective way to market and sell with strong competition on the auction floor. Our auction success rate is sitting at 75.4% with our properties that have been taken to auction selling in 30 days on average, which is encouraging.
The apartment rental market continues to bounce back with our vacancy rate falling as more local tenants move into the city for a more relaxed lifestyle. While we have seen a slight drop-off in rents for some smaller, student-style apartments, there’s plenty of confidence in a strong return for international students as New Zealand remains one of the safest countries in the world post-global pandemic.
Competition Creators – Ray White New Zealand
Ray White New Zealand agents sold 81% of all auction properties last week. Our sellers who proceeded to take their property to sell under the hammer were rewarded with a sale price 11% higher on average than the best offer prior last week. On average there were 3.7 average registered bidders per lot nationally last week, compared to 2.7 bidders in the same week a year ago. Some 89% of all auction campaigns had active bidding on the day.
With this week’s data encapsulating a long weekend, some may have expected a decline in the results being achieved. In contrast, what we have seen is a strong rise in the number of registered and active bidders across the board this week shows a concentrated buyer pool, relative to available property for sale, actively competing to secure property.
This has translated into strong clearance rates under the hammer and exceptional prices being achieved. The auction process continues to provide absolute transparency on both sides of the transaction, whether buying or selling there is significant benefit in being able to observe the market demand for a property. When we look at that demand, it is best highlighted by the number of properties being sold prior to their scheduled auction and currently one in six properties are being sold early. Some 89 per cent of all auction campaigns had active bidding on the day.