Market Comment – May 2019

Leading net returns & no Capital Gains Tax spark ‘revival’ in AKL’s investment market – rwaucklandcentral.co.nz

There’s been a noticeable lift in buyer activity for Auckland’s property market with April’s listing and sales numbers up on March. Although buyers are still biding their time, a steady mix are coming through our open homes and making positive enquiries. Among them are the first home buyers and baby boomers, which remain the most active. However, we are also seeing early signs of a ‘revival’ as number-crunching investors are catching on to the CBD’s apartment market, which continues to offer some of the best net returns in the country.

Complimenting these early signs of a revival is the ruling out of the recently proposed Capital Gains Tax, which is great news for investors who are still feeling the ongoing impact of the amendment to the Overseas Investment Act and tougher restrictions on LVR ratios. With Capital Gains Tax out of the picture, a resurgence in our investment sector could very well be on the horizon.

And finally, our property management team have been extremely busy, and we’re very proud to announce that they have been recognised as the number one team nationwide for both properties let and new managements coming on in March. This is not only a testament to their hard work and commitment to landlords, it’s also a clear sign of how active our rental market is in the CBD.

So, if you’re looking to rent, buy, sell or invest in Auckland’s central city apartment market, talk to us – we’re the experts after all.

The Auckland region’s average asking price drops below $900,000 – realestate.co.nz

The Auckland region’s average asking price in April dropped to its lowest level since 2016 and houses are taking longer to sell according to real-time statistics from realestate.co.nz. The region’s average asking price fell 4.5% to $899,916 compared to the prior month and 5.8% compared to the same month in 2018. *The all-time high average asking price for the Auckland region was $982,673 in December 2017.

“We have left behind the frenetic market of 2014 to 2017 where asking prices spiralled dramatically upwards, largely underpinned by fierce competition in the market and an increase in local and offshore investors,” says realestate.co.nz spokesperson Vanessa Taylor.

“We’ve now had two years of stable pricing with a dip in average asking prices in the Auckland region this year,” says Vanessa. New listings in the region fell in April (-12.5% to 2,957 listings) and compounded with properties sitting on the market for longer, buyers aren’t under the same purchase pressure.

“The current Auckland market is not the new normal, it’s the old normal which was prior to 2014, when there was time to negotiate and ensure that if you sold your house, you also had your new home lined up,” says Vanessa.  “If you sell your house for less than CV, in this current market it’s highly likely that the home you’re purchasing will also sell for less than CV.

“The New Zealand property market can have upsides at the other end of the transaction, and we mustn’t lose sight of this.” The Auckland market also represents potential opportunity for first home buyers.

Why now is a good time to be a first-home buyer – oneroof.co.nz

Recently released data on property sales in March this year brings good news for home-buyers. In March, sales in Auckland of just over 2000 dwellings represented a fall from March last year of 18 per cent, or 13 per cent if we smooth out volatility by looking at the three months to March versus a year ago. Annual sales for Auckland now sit at just over 21,000 from a peak of 33,000 late in 2015. For the rest of New Zealand, sales in March were down 10 per cent from a year ago and 6 per cent for the quarter versus early-2018. Non-Auckland sales for the year to March of 53,000 were down from a 64,000 peak in mid-2016. Are sales falling because there are not enough houses coming onto the market? No. The number of listings at the end of March in Auckland was ahead 14 per cent from a year ago and for the rest of NZ they were down by only a small 3 per cent.

So what do we expect to happen when we see falling sales and rising stocks? Easing prices, of course. In Auckland, the house price index for March was down 3 per cent from a year ago which was the price cycle’s peak. For the rest of New Zealand, prices in March were up by 7 per cent from March 2018 — but the pace of increase is slowing. Although there is good support for the housing market from new record low mortgage rates and a strong jobs market, outside of some selected regions the feeling of buyers that they need to act now before prices go higher has gone. This means these are good times for first-home buyers.

Fresh buyers have time to peruse the available stock in a non-frenzied manner, figuring out what property will suit them best, and perhaps making some low-ish offers in the hope they can snare a bargain. That has become the dynamic in Auckland and will happen elsewhere around the country as regional markets slow down and prices flatten out in the coming year.

It’s a buyer’s market – www.nzherald.co.nz

We’ve recently received data from the REINZ telling us what real estate activity was like in March this year. For home-buyers the news is good but for real estate agents, things are looking less rosy, with falling sales.

In March, sales in Auckland of just over 2000 dwellings represented a fall from March last year of 18 per cent, or 13 per cent if we smooth out volatility by looking at the three months to March versus a year ago. Annual sales for Auckland now sit at just over 21,000 from a peak of 33,000 late in 2015.

For the rest of New Zealand, sales in March were down 10 per cent from a year ago and 6 per cent for the quarter versus early-2018. Non-Auckland sales for the year to March of 53,000 were down from a 64,000 peak in mid-2016.

Are sales falling because there are not enough houses coming onto the market? No. The number of listings at the end of March in Auckland was ahead 14 per cent from a year ago and for the rest of NZ they were down by only a small 3 per cent.

Although there is good support for the housing market from new record low mortgage rates and a strong jobs market, outside of some selected regions the feeling of buyers that they need to act now before prices go higher has gone. This means these are good times for first-home buyers.

Fresh buyers have time to peruse the available stock in a non-frenzied manner, figuring out what property will suit them best, and perhaps making some low-ish offers in the hope they can snare a bargain. That has become the dynamic in Auckland and will happen elsewhere around the country as regional markets slow down and prices flatten out in the coming year.