Welcome to this months market wrap on North Shore property.
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This is my last wrap for 2019 so I hope you all have a great Christmas and holiday season and that you get some sort of break in the coming months. Let’s hope for a decent summer as well!
In This Week’s Market Wrap
– Review & Predictions for 2019
– Market Performance
– New AML Rules and what do they mean?
– New Listings
– Cooper & Co Auctions
Our Predictions for 2019
Making predictions is always dangerous but you have to believe in something! So it has certainly been a very interesting year. We kicked it off with a new government, they started talking about changing this and that, confidence declined, as it always does, we started noticing the property market slipping, then we saw the introduction of the Foreign Buyer Ban through changes to the Overseas Investment Act and here we are.
Whilst I don’t think that the removal of foreign buyers purchasing property here in NZ will or has made much of a difference from a transactional point of view, it has certainly effected confidence. We have been led to believe that offshore buyers have been driving our market for so long, that surely stopping them from buying will crash the market?? Clearly not true in both cases, but when confidence spirals down, it builds momentum. Hopefully this latest round of tweaks by the RBNZ, and some summer sunshine, will stop this momentum and we will return to a happy stable market that just ticks along nicely presenting opportunities for everyone.
And I think we should be able to expect this in the new year. If we take a look back at the previous 5 years or so, toward the end of each year, something has changed, and the market has gone into a holding type pattern. Since 2013 when it was sky rocketing, we have had the implementation of LVR restrictions and then the changes that followed in the years after. But in every case, in the new year, confidence improved and off we went again, although at a slightly lesser pace than before.
This pretty much continued, LVR tweaks each year, talks of tightening monetary policy which actually began at one point, and growth slowly declined, then in 2017 no changes by the RBNZ, instead the government changed and we really started to notice a decline in confidence and therefore the market.
But the RBNZ then relaxed the “speed limits” at the start of 2018, people went on holiday, came back realised the sky hadn’t fallen, confidence improved, the market picked up (although only to somewhat stable) and life carried on.
back end of this year has been no different with all the talk of the
Foreign buyer ban, and finally it’s implementation, we have noticed a
big decline in confidence, which has impacted prices and sales,
certainly here on the Shore anyway. But the sky still isn’t falling.
It’s been tougher than we have seen for sometime, not because the OIA
change has had a huge impact, it’s probably quite relative to every
other change, but the market was already only just stable. It’s almost
like it was the straw the broke the horses back.
However!! In the new year, we have further relaxed LVR restrictions and still extremely low interest rates. So we see no reason for the same sort of response that we have seen at the start of every other year, people go on holiday, confidence comes back, we realise the sky still hasn’t fallen, and life carries on with business as usual. I’m not predicting an uplift, or price growth, not at all, but more a return to the steady stable market we had at the start of 2017 and even 2018 to some degree.
Till the next round of changes…
In the final run to Christmas, the North Shore market continues to show consistent, fair trading and is well poised heading into 2019. In this past week as usual activity on the ground has been somewhat frantic as people look to close these off before Christmas.
North Shore’s median sales price continues to hover around the $1M level, however it is showing a steady downward trend, November 18 had the highest median price in 8 months of $1,041,000 which is surprising and almost contradicting what we saw on the coal front. It is however, still down 2.2% on November 2017 median of $1,064,500. Across Auckland prices seem pretty stable to be fair, they are reading down 1.5% on the previous year, but a quick glance over the past 24 months shows clearly prices hovering around the $850k mark.
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. This will eventually slow as the regions play catch up with Auckland.
Open Homes & New Listings
Listings continue to tighten with now just over 1600 properties available on the North Shore. That’s over 300 less than a few weeks ago. Which means well over 300 properties have either been sold or withdrawn this month. This will continue to drop away as January also isn’t a strong listing month, but in February, expect about double the new listings of Jan probably up around 600 new properties coming to the market. Good for buyers, but for sellers, I’d be trying to get in and get out before the masses. Food for thought
Cooper & Co Auctions
Steady and consistent C&C has cleared 37% and 38% over the past couple of weeks. Pretty much the same as the same period last year to be honest.
That’s it from me, if you have any questions as always just give me a call, otherwise have a great weekend, an even better Christmas and New Year, and we look forward to seeing you in 2019! If you are heading away, please be safe on our roads!