16 July – MARKET COMMENTARY, REAL ESTATE, MARKET UPDATE

Moving in the right direction

Positivity is in the air and despite the dire predictions which we felt were unfounded, the proof is in the pudding with the current market indicators.

MARKET SNAPSHOT

As predicted the pent up buyer demand from pre-lock down and buyers wanting to purchase since has resulted in a record June volume of sales. Not a surprise with around 450 sales deferred that would have previously occurred through the April and May selling period.

Prices under this enormous pressure from eager buyers have since risen bringing our year on year median sale price to a healthy 7.3% growth. Much better than any bank can offer for investing your money.

However, it would be foolish to think we are over the hill yet as we are still down from our peak median sale price in February this year for the North Shore of $1,155,000 and Auckland this March with $950,000. Overall still having us down 8.9% and 2.4% respectively from the impacts of COVID 19.

With elections looming the typical real estate freeze of activity is expected as we head into August and that ever exciting September date. It is becoming very interesting with all the changes in the National government, smaller parties looking for bigger pieces of the pie and the existing government battling unprecedented challenges.

Net migration is up and still rising with the year to May having an NZ population  gain of 80,700. This alone is putting additional pressure on available rentals, rental prices and on existing housing stock for purchase.

With record-low interest rates and improved confidence around the residential property market in Auckland we expect, minus the election blip as always, continued growth on property prices with 2021 looking to be strong despite the bleak economic outlook.

The housing stock for sale year on year is as follows;

The differences may not seem large but this is a downward trend on new listings and seasonally a starvation period for searching home buyers.

This coupled with record low building consents and an expected decrease in construction from developers over the next year or two, could see this downward trend continue to drop below 1000 homes for sale on the North Shore and below 10,000 in Auckland. If we get to these levels we will be equal to some of the most buoyant, high demand and property price growth periods seen in over a decade.

I always love the excitement of change as it brings opportunity and the choice of risk and reward or should we play it cautiously. Every person takes their very own approach but it would be fair to say we are up for some interesting months of market discussion and decision making ahead.