The current bearish market is a reflection of confidence on both sides of the property selling equation. Traditionally, winter has always sapped confidence, but when you throw in a general election and the on-going effect of acute lending restrictions by all the major banks, then you have a perfect storm of uncertainty – to sell or stay put, to buy or hang back?
And, with the comings and goings of the past fortnight that have shaken up the political landscape like we couldn’t even have imagined at the beginning of the month, all bets are now off to who’s going to be in power at the end of September. This has introduced further uncertainty into the market and cast more doubt into people’s minds regarding their property buying or selling plans.
However, this blip in the statistics should be read for what it is – an unstable phase in an otherwise steady market. Remember, no matter who holds the balance power going into 2018, Auckland will still be faced with net migration and an under supply of housing for some years to come. And in a desirable area, such as greater Ponsonby, that means property prices should maintain their value and represent a gilt-edged investment for the future.
Taking into account the tightening of lending criteria and the uncertainty surrounding the result of next month’s general election, there are no real surprises that the volume of sales have shown a reasonable decline in July compared to the previous month, and a double-digit fall year on year.
With a drop in consumer confidence and the resulting decline in the total number of sales, the median was bound to be affected. Interestingly, though, we observed strong competition for ‘good’ properties. Conversely, those with ‘issues’ or ‘defects’ need to be sharply priced to attract buyer interest – and to gain finance to purchase.
Month on month we witness the vast difference between the short and effective marketing campaigns offered by auctions – typically three weeks – versus the much longer and less direct sales cycle delivered the other two methods. At Ray White Ponsonby we are fully committed and have vast experience in this highly successful sales method.
As above, the huge success rate of auctions carried out by our company far exceeds any other method of sale. Historically, a percentage greater than 60 of all properties we market are sold by the auction method – and we stand by this as the most effective way to achieve the best price for a well presented, well maintained property.
One reason auction numbers have fallen a little lately is that the banks are increasingly reluctant to lend on an ‘unconditional’ basis – because of a property potentially having ‘issues’. Properties that are not 100 percent often need a form of marketing that allows the purchaser to insert conditions such as ‘conditional on finance’, thus leaving the seller with a period of uncertainty as and whether their property has actually sold.
This map gives you an overview of total sales and median price across the Greater Ponsonby area. Hover over the yellow dots for the statistics on each suburb.
The Rental Market
Winter has seen the number of prospective tenants drop, which is not uncommon for this time of year. Tenants are aware of this and so requests to negotiate on weekly rent have become a topic of conversation, as has insulation and heating. Whilst it is not required that landlords provide heating, and the insulation requirements do not take effect until July 2019, these things can certainly make your property stand out in the crowd, especially when there is more supply than usual. We have also been finding that 1-2 bedrooms properties have been more popular than 3+ bedroom properties lately.