As we speed through February, leaving behind a record month in December and a very slow start for January, where the appetite for real estate was overtaken by summer holidays, new anti-money laundering (AML) legislation and some trepidation around where the market was heading, the feedback we have received from many potential buyers is that they were going to ‘just hold off and assess the market’. This resulted in low activity in terms of sales in many sectors.
While sale prices and sale numbers have drifted down a little in Auckland in January, overall the effect is minimal in terms of the small percentage changes. Indeed, some areas, such as Auckland City, Waitakere, and parts of Manukau, saw steady increases according to the REINZ’s latest statistics, showing that there are always exceptions to the rule in any market. These anomalies could be due to factors around location for transport, schooling, or employment opportunities.
The good news is that this measured recalibration of prices and increased volume of housing stock has opened the doors for first homebuyers, who are now coming to the market in their droves. They are seeing a newfound opportunity on the back of well-paid jobs, cash-rich Kiwi saver accounts, and historically low interest rates. These buyers are ready to buy and are looking at all properties up to and including million-dollar properties.
If we look across the Tasman to Australia, we are seeing a market that has flourished over the five years come to a much faster and more abrupt slow down than we have seen in Auckland. Interest rates are still attractive over there, but the banks have become very tight with their lending – especially with major developments and subdivisions – resulting in what in a market place that has been bitten into the core, with days escalating into months on the market for good existing properties. Interestingly, Kiwi Build appears to be competing with the ‘existing’ market in much the same way over here, where there is now plenty of choice, no wait times, and no potential mixed private/government housing, and a better choice of location in some instances.