With Spring around the corner there is an air of optimism in the market. Currently, there are still reasonable stock levels in the market, offering opportunities for buyers, with more properties booked into the pipeline in the coming months. Will this high level of available stock satisfy the long tail of buyers, or just fulfil a need that’s already here because of the continuing housing shortage and a growing population in Auckland?
What is clear is that first-home buyers are in prime position. They are savvy and determined, and as they storm the open homes in increasing numbers, it is obvious they are making up the majority of buyers in the market place. With ready-to-go borrowing or family support, they are taking advantage of the levelling and slowdown of house prices, bolstered by the availability of incredibly low interest rates. How low can it go is the question?
Interestingly, we are beginning to hear that it’s now cheaper to get a mortgage and pay it off than to pay rent. This has led to more buyers engaging with mortgage brokers, who, in turn, are helping and supporting buyers and ensuring that they have access to the best opportunity to buy with the most they can afford to spend.
Multiple offers continue to be the theme at sale time, and are now the new normal, driving competition in a competitive market place for buyers. Auctions are still the preferred method of sale for us at Ray White Damerell Group – week in week out, our auction room above Ponsonby Central is filled with multiple bidders, and our market-leading clearance rate is still holding high at 77%.
In most areas in the three months to July the median house price has been levelling out or trending down. Combined with the shortage of stock, this has created new momentum in the market, with the number of sales in July climbing to the highest in three years and opening up new opportunities throughout the central Auckland suburbs and across the North Shore for buyers to invest in without the fierce competition of investors.
The lift in apartments sales, both the month and year on year, seems to be partly driven by first-home buyers looking at a way to step into the real estate market at a affordable level, buoyed by the prospect of potentially paying less for a mortgage than they would in rent.
If we look at the big picture month on month, there has been a smaller shift down in prices in some suburbs like Greater Ponsonby (down 1%), but year on year the numbers are positive, with medians up 7%.
Stretching out from the city through the western corridor, the number of house sales are up, year on year, 43% in Blockhouse Bay, rising to a whopping 86% as you pass Titirangi. This corridor and its associated suburbs offer first-home buyers super value for homes sitting just under the million-dollar threshold.