Welcome to this months market wrap on North Shore property.
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It seems a little late in the year to still be saying this, but nonetheless I hope you all had a great Christmas, New Years and holiday season, and happy Chinese New Year as well. Welcome to the year of the Pig!! I’m told the pig is the symbol of wealth, which is a good sign given where things finished up last year with the property market!
We now have enough data to actually formulate some sort of report with completes figures in for 2018, and the first sets trickling in for January. It’s still a bit early to establish just how we are tracking in 2019 but early signs are good.
In This Month’s Market Wrap
– Sales Volume’s
– North Shore Median Prices
– Cooper & Co Auctions
– General Market Performance
December 2018 recorded the lowest volume of property sold in 7 years in December, down 12.9% year on year. But across Auckland that number was closer to 25%, the lowest in 10 years, and on the North Shore 23%! This is not surprising though, given the state the market was in when we left it for Christmas and the holiday season. Stock levels were running at a high and agents everywhere were battling to get properties sold.
This cannot be entirely attributed to a lack of buyers or activity though. Especially here on the North Shore where we also saw a dip in prices starting around the second half of 2018. Buyers cottoned onto this downward trend very quickly in the latter half of the year, and only grew in confidence as the year went on. They starting negotiating harder, or simply got very cautious about over paying, and many were quite happy just to wait for the right property to come along. Many continue, to be taking a “wait and see” approach, hoping the downward trend would continue (To be honest I think these guys will miss out as the market does feel like it’s stabilised)
Vendors took a little longer to adjust though, which is understandable and very much expected, as they held out hope that someone would come along and pay a little more. So much so they just didn’t sell – which attributed to the lower sales volumes – it wasn’t that in some cases there was nobody to buy properties, Vendors just weren’t ready to sell at the new prices being offered.
North Shore Median Prices
Please note all of the following stats refer to the North Shore only. Also I’m going to start with the positive news which is it feels like the correction I’m about to discuss below has finished and prices have stabilised again. Just at a slightly lower level than before.
It’s always hard to get a true gauge on exactly what has changed and by how much. Year on year in December, median prices were down -11.6%, but those that read my reports know I don’t like to hinge big statements or conclusions based on simply comparing one month to another. Especially when the data set is relatively small, which it is when you’re only looking at a few hundred sales on the Shore.
So let’s spread that out a bit and look at the average value over the final quarter of 2018 vs the same in 2017, we saw a -6.4% drop in prices. In Q3, a -7.4% drop in prices. So the during the final 6 months of 2018 we saw about a -6.9% drop overall in prices compared to the year prior. A big contrast to the first half of 2018 which was very stable, recording 0.6% growth.
And that is pretty much what it felt like on the coal front. Some dropped more, some dropped less, and the odd one bucked the trend and went up – but the general trend was downward.
However as I said at the start of the section, it feels like price changes have stabilised, and the “correction” has likely (hopefully) ended. BUT, we need more data and this comment isn’t really based on stats, it’s just how it feels based on what I’ve seen so far this year. In a week or so we will have the January data from REINZ which will start to tell a picture – but it will be a couple more months before we know for sure.
On a more positive note though, across Auckland prices have remained very flat and stable. 0.2% up in the back half of 2018, and only -0.5% down in the front half. So it’s not all doom and gloom across the board things are fine, it’s just the Shore and a couple of other ares which were the highest performing areas in the boom, that are feeling it a wee bit more right now.
General Market Performance
So yes the market has cooled, but it does appear to have stabilised and there is an apparent calm about the market place. People aren’t panicking on either side – for the most part anyway. We are confident 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. Like what’s happening over the ditch.
There is an eclectic combination of factors contributing to the current market, ultimately producing an element of more than usual choosing to ‘wait & see’. We are seeing producing great opportunities for buyers and we have experienced a marked increase of first home buyers.
What has influenced the this correction? Some of the factors include the introduction of the new Overseas Investment Act, the declines in the Australian property market and potential Capital Gains Tax for investors. Combined with strong listing levels but lower sales volumes has led Auckland to be holding 3 weeks of stock above average – which indicates a buyers market – but only just. On the contrary though, 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 and it will be a year where choosing to align with the best available property experts will be rewarded.
That’s it from me, if you have any questions as always just give me a call, otherwise we look forward to seeing you out and about! And Happy Waitangi!! For those that are still away and heading back today, please take care on the roads and we wish you safe travels!!