Welcome to our Monthly North Shore wrap for August. To view the full report click here.
Welcome to (finally) our wrap up of August and Winter! It’s actually slightly different conversation for a change, yes a lot of the indices are reading the same, but there is an air of confidence out there, for the first time in over a year, most people appear to be pretty confident about the property market moving forward.
The short story (a summary of below)
Things are looking good, volume is still down, but prices are stable and clearance rates have significantly improved. Stock levels are still very low and demand at the moment appears to be stronger than supply, which can only lead to one thing. It’s too early for statements like that, but they are becoming a part of conversation. Lets see what September and October bring. Hopefully another World Cup!!
In This Week’s Market Wrap
– Winter Wrap
– Auction Results
– Listings & Stock Availability
Market Performance & Winter Wrap
Please note unless otherwise specified, stats and figures quoted below are for the North Shore
The lack of new listings throughout the Winter months led to very low stock levels, especially in the back half of Winter. The removal of CGT from conversation and the reduction of the OCR leading to record low interest rates has led to more people buying, more investors back in the market and generally more confidence that the sky isn’t falling. We have definitely seen a resurgence in activity over the past couple of months, but has there been more buyers, or maybe just less stock? Most likely it is a combination of both but there are a number of positive contributors in play at the moment.
- Prices going up in the regions – in the more desirable larger regional cities, the price gap is no longer as big as it once was. Meaning more and more are opting to just stay and buy in Auckland
- Investors who had been holding off from the market, are not getting anything for their money in the bank. Confidence that the Auckland market isn’t going to tank is luring them back in.
- First home buyers are in force, this past 6 months has probably been the best time to buy for them in years! And money is extremely cheap.
- It’s a good time to upsize. The changeover cost is more beneficial when upsizing in a downward market – so we are seeing more of this happening.
- Immigration is still very strong
- People have been sitting on their hands, waiting to see what will happen. Well they still need to buy, there is a back log and as confidence improves in Auckland, they will begin to re-appear.
- Only 1300 properties available on the market, it was over 1900 six months ago, a huge factor.
- Things are looking good in Sydney and Melbourne across the ditch. We’ve been following Sydney for sometime, why should this time be any different?
All of this has led to a significant improvement in the Auction clearance rates. Whilst this improvement is attributed to many of the factors listed above, the reduction in listings is a big part. The graph below demonstrates how clearance rates have improved as listings on the shore have dropped away since May this year.
Median Prices – During August we saw an improvement in median prices when compared to 2018, up to $999,000. This is still however down quite a lot from the median of $1,072,000 set in August 2017. During the Winter months Jun-Aug we actually saw an improvement of 1.2% in median prices compared to last Winter, but down 2.7% on 2017. All in all good reading however the REINZ HPI is a more accurate measure to go by, and this is down nearly 5% on 2018. Which makes more sense based o0n what we are seeing.
All in all prices have fallen, but as said numerous times now they don’t appear to be falling anymore. If anything we have started to see more and more results above expectation.
Days on Market – Whilst DOPM steadily improved throughout winter, properties are still taking a couple of days longer than last year, five days longer than the previous three months and 5-6 days longer than the winter months in 2018 & 2017. Honestly these past few weeks do appear to have been better, new stock has been clearing quicker the clearance rates tell us that. It’s likely as the results filter through, and some of the older stock that has been on is sold, that we will start to see a true picture for DOM next month as for new listings it certainly feels better.
Volume of Sales – Down down down. There isn’t much to write here the volumes are down across the Shore, 13% month to month compared to 2018, but only 2% compared to last Winter. Which is much better reading. Volumes are down across Auckland and now NZ as well, so this isn’t news shouldn’t be new to you.
All in all, a winter that started with some pretty average figures and has moved on to Spring with everybody feeling a lot more confident about the market moving forward. Whether we see an improvement in prices is yet to be seen, but all in all – it’s definitely the best it has been during the downward cycle right now
8 weeks now of improved Auction results, and last week was no different for both big blues. The combined average across the past 8 weeks is 51%, 4 weeks 50%. But check out the 4 week averages per company listed below. Harcourts called more Auctions over the past month, and we cleared almost twice as many!!
Combined Clearance Rates*
4 week average 50%
This Week 53% (2018 – no Barfoot data from this week)
Harcourts C&C – 50% Clearance Rate (9/18)
Barfoot* – 56% Clearance Rate (10/18)
4 Week Average Per Company
Harcourts C&C – 64% Clearance Rate (37/58)
Barfoot* – 35% Clearance Rate (18/51)
The graph below illustrates how up and down these results can be each week, but also show the trends for both companies and the combined result since May this year. A pretty clear improvement!
* Harcourts Cooper & Co and B&T In-Room Auctions. *Source: Barfoot website – Thursday In-Room Results
Please note clearance rates are for properties sold under the hammer or post negotiation that day (sales the following day are not included)
Listings & Stock Availability
I normally pull this figure on a Saturday morning after the Thursday auctions have been removed and the rest of the new stock for the week is up. But Thursday is pretty close. No change here 1304 properties available on the shore this week. The graph shown earlier in the report clearly shows the continued decrease in stock availablitly on the Shore. We do expect this to increase following the school holidays as Spring sets in – but time will tell!!
That’s it from me, have an awesome weekend and GO THE ALL BLACKS!!! 🙂