Welcome to my weekly market wrap. To view the full report click here. Happy Matariki! Now we are past the shortest day it’s all sunshine and happiness from here – bring on Summer!! (Too soon?)
Sorry if you didn’t rec. this last week we had an issue with our servers so this is pretty much the same email again with our May reports in graph and table form available for you below, and just the Listings & Auction Results etc. updated.
The short story
Stock availability continues to decline as expected in Winter, the volume of sales in May was not surprisingly about 20% below that last year on the North Shore, sale prices seem to have stabilised and all in all, with the lack of new listings, open homes and buyer activity is actually pretty good. The pool of buyers is still the same, there is just less to look at. Under $1m relatively good houses are humming along nicely, The further above $1m we go the tighter it becomes and circa $2m on the Shore especially through the Bays is proving pretty difficult.
Areas such as Birkenhead Point and Northcote Point still appear to be humming along nicely with properties selling without too much trouble, for the most part anyway. I would put this down to high demand in a tightly held area with low stock availability. Through Bays most buyers are prepared to look at a multitude of suburbs, giving them lots of options, and therefore less urgency to purchase.
In This Week’s Market Wrap
– REINZ House Price Index
– Auction Results & Stats
– Listings & Stock Availability
– Coming Soon
REINZ House Price Index
The HPI is a great measure as it removes variances in the composition of data sets that can skew results, such as an unusually large amount of low or high priced properties being sold that particular month. These sales can especially skew small data sets like those we are dealing with right now with the volume of sales being so low.
Newspapers and media outlets love using the median prices – as they can fluctuate pretty significantly month to month – providing fantastic click-bait headlines for the many journos out there who only care about getting views, as opposed to actually providing good information.
You will have noticed in the past we often use data sets averaged over 3 month periods, to give us a better idea of what’s happening. The HPI data improves on this accuracy. To get started though, I’m stealing Tony Alexanders research for Auckland & NZ – which shows in the three months to May average house prices in Auckland were down by 3.5% from a year ago while the rest of New Zealand was up by 6.8%. Three months back those annual changes were – 2% and 8.1% respectively. So Auckland’s price decline has increased, not stabilised – which isn’t what we thought from looking at the medians. Across the country prices are still climbing, but the rate has slowed.
On the North Shore, as we already knew the biggest downward change was during the 3 months to Feb this year of about 2.65% when compared to the previous quarter, and this was off the back of a continued decline in prices on the Shore, which began in the 3 months to August 2018. If you’ve been following the North Shore Market, this all makes perfect sense. In this most recent quarter to May, that rate of decline has slowed, still down 1.1% compared to the previous quarter, but it has slowed. Looking on a monthly basis though it does still appear to have stabilised , with very little change each month since Feb, with the HPI for the North Shore at 2909, 2912, 2915 & then 2906 for Feb through May respectively.
So there you go, another way of looking at data, to give us pretty much the same insight. When do we expect to see the market come back, that’s a prediction well out of my pay grade but all the underlying factors are still in play, housing shortage, low interest rates, immigration etc. And to be fair – we are 3 years into the flattening, here in Auckland and the Shore anyway. Volume started dropping in 2015, prices started to, or arguably did plateau in 2016, we’ve had a wee fall and they appear to have plateaued again now in 2019. They say on average a 4 year turnaround. So post election next year assuming no crazy new policies, or Global events?? 2 years at most?? Who knows, guess we will have to wait and see.
Listings & Stock Availability
Listings continue to decline at around 3% per week, with just 1482 properties available on realestate.co.nz on the North Shore this morning.
Another strong week for Harcourts C&C clearing 50% under the hammer and plenty in negotiations straight afterward – our own listing included!! The 4 week average is still around 5% below the same period last year, where it has been for 3 weeks.
There’s strong activity in the sub $1m bracket with first home buyers out in force, plus the odd investor starting to pop up again.
Harcourts C&C – 50% Clearance Rate (6/12)
Barfoot* – 23% Clearance Rate (6/26)
Combined Clearance Rates*
4 week average 39% (2018 – 44%)
This Week 32% (2018 – 47%)
*Source: Barfoot website Please note clearance rates are for properties sold under the hammer or post negotiation that day (sales the following day are not included)
Off Market (please enquire)
Development Opportunity in Central Takapuna – 2500sqm with lake/sea/city views
Takapuna – A fantastic 3 bedroom townhouse
Devonport – A beautiful Villa in Narrowneck/Devonport (4 weeks)
Campbells Bay – A near new freestanding one level 2 bedroom home on a freehold site (3 weeks)
Campbells Bay – A fantastic modern family home with awesome entertaining and pool
Browns Bay – 2 houses on freehold sites, and some land
Bayswater – Talk to me – we have a few homes coming in a couple of months
Forrest Hill – A very tidy renovated 3 bed 2 bath
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 this weekend!