AUGUST 2022 | PROPERTY REPORT The group with the family factor. MarketCentralAucklandReport.
Contents.
3 04. Market Comment 06. Article – Catherine Smith: Every auction needs a Mr $100 08. Auckland Central Statistics 10. Recent Sales 12. Article – Kelvin Davidson: Is it too early to call the end of house price falls? 14. Why choose us? 16. Marketing your property 18. Meet the team
City Realty Group Director 021 595 976 | daniel.horrobin@raywhite.com DANIEL HORROBIN Market Comment. Ray AucklandWhiteCentral.
Director of City Realty Group, Daniel Horrobin, says: “These continuing strong auction clearance results provide definite confirmation that Auckland’s city apartment market is bucking the trend experienced by other markets.
Daniel says: “There’s definitely an expectation that the CBD will benefit from this influx of people and while it may not happen overnight it will happen over the coming months. Auckland’s CBD is a natural and convenient place for international students and for migrants to first ‘land’ and assess the lay of the land.”
Another strong month in July in terms of auction clearance rates has been the third in a row achieved by Ray White Auckland Central.
Meanwhile some buyers who previously struggled to get mortgages are reportedly starting to re-apply for them, hopeful after the Government loosened somewhat lending requirements from July 7 of this year. This happened after it was judged that some of the wording of the CCFA (Credit Contracts and Consumer Finance Act) enacted on December 1, 2021 had initially resulted in credit conditions being tightened too Aftermuch.remaining relatively level for several months, new listings in the city apartment market increased by 20% in July 2022 compared to the previous month, buoyed by evidence of positive sales results. Ray White’s agents in the CBD have noticed an increased level of inquiry about apartments, with a lift in the last fortnight in particular. There has been a 2% decrease in the vacancy rate across their portfolio from June to July 2022. This is corroborated by Trade Me’s latest Supply and Demand Report on the Auckland rental market, showing an increase of 2.6% in the number of searches over the last four weeks compared to the previous period. This report also states a 3.7% decrease in rentals’ days on market on the site.
Daniel says the increase in inquiries, positive auction clearance rates and rise in new listings are all indicators of positive energy in the market.
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Auckland Centrals’ third consecutive month of strong auction clearance.
is being driven primarily by investors, predominantly those seeking apartments priced towards the lower end of the market. They express confidence that New Zealand’s re-opening to all international students and migrants from July 31 2022 will progressively drive increased demand for rental apartments in the city. (This is the first time New Zealand’s borders have been fully open to everyone, including those from non-visa waiver countries such as China and India, since they were shut to keep Covid-19 out in March 2020.)
The Auckland Central’ team have robust, targeted structures and processes in place around their auctions, resulting in packed auction rooms week after week and a sense of urgency and competitiveness amongst Activitybuyers.
“July’s strong results mean we have achieved an 80% auction clearance rate over the last three months combined. And Ray White Auckland Central’ year-to-date auction clearance rate equates to a pleasing 75% over the first seven months of this year.”
Every auction needs a Mr $100
If you want to be the guy who gets the most laughs – and snags the most propertiesyou’d do well to take a leaf out of Habeeb Urrahman’s book.
By the end of an afternoon of intense action at Ray White Auckland Central’s auction room, the agent had earned the nickname of “Mr $100” last Thursday as he inched up bids in $100 increments on three city apartments and a carpark on behalf of his his client, a phone bidder. Occasionally, he went crazy and added $400, to amuse the room.
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Catherine Smith:
And while the $100 strategy earned Urrahman more than a few groans, it paid off for his buyer, who snaffled two of the apartments and the carpark, for a total spend of $660,800. “The journey to buy real estate is a chore, but if you can add excitement, it takes the steam out and makes it a good experience,” Urrahman told OneRoof. The agent estimated the unorthodox tactic also earned the vendors of the four properties, marketed by mother and daughter pair Judi and Michelle Yurak, another $10,000 to $30,000 apiece. Urrahman said his client, a 30-year real estate veteran and cash buyer, tended to go against market trends. “They entered the market when everyone else paused, and they were very passive before Covid,” he “Theysaid. started buying about six months ago and then really upped the ante in the last 10 weeks. I’d say we’ve spent about $4m in that Sometime.”25buyers crammed into the auction room on the rainy Thursday afternoon. More, like Urrahman’s client, were bidding on the phone through their agents. The energy in the room was a sign that confidence had returned to the inner city investor market, Ray White City Realty Group director Daniel Horrobin said. The disappearance of the international student market at the beginning of 2020 hit the rental sector hard, but Horrobin said sales and rentals under the company’s property management division were on the Mostup. of the buyers at Thursday’s auction looked to be well-heeled older boomers,
“In Auckland, across all our offices, 38% of properties still went to auction in the past month – and that’s very similar to the pattern since the start of the year. We’re not seeing a lot of vendors doing off-market deals,” he said.
“We have a 63% success rate under the hammer, but then there’s the sales post auction. People understand that there’s a process,” he said, adding that auctions gave vendors three chances to get a buyer through an offer during the preauction campaign, an unconditional buyer at auction, or a conditional buyer after auction.
Ray White auctioneer Ted Ingram set a fast pace and reminded bidders that “cash and courage” was all that was needed to secure a property.
Theyears.sentiment was echoed by Ray White’s lead auctioneer, John Bowring, who told OneRoof that the company had kept a strong auction presence through 2022’s market change.
A leasehold one-bedroom apartment on Dockside Lane, off Beach Road, sold smartly for $105,000 to a phone bidder, but then interest really perked up for the next lots, an apartment in the Zest, on Nelson Street, and two apartments at the Volt on Queen Street. The hammer came on on the Zest unit at $270,000, more than 67 bids after it went on the market for $235,000. The result pleased the vendors, who were smiling as they received the congratulatory bottle of champagne as they headed for the door. Urrahman’s cheeky $100 bids won his buyer the two apartments in the Volt block on upper Queen Street, one for $296,000, the second for $293,100. But the room was left gasping when a carpark in the same block sold for $70,100 - 42 bids after it reached its on-market price of $53,000. “If there’s a dollar on the table, it needs to be there for the vendor,” said AnotherUrrahman.investor, who dropped out early, told OneRoof that even though parks in this building were restricted to apartment owners in the block, any carpark was a good buy since Auckland Council had steadily cut back spaces around the city. Only one lot passed in, an apartment in the refurbished heritage building above the Farmers store on Victoria Street. The one bid of $270,000 fell well short of the $300,000 Ingram needed to get it on the market. Records show the vendors had paid $252,000 for it eight years ago.
7 but there was one young couple, complete with baby, who showed interest in the first couple of lots.
Ingram said bidders should feel encouraged by the amount of competition in the room, adding that this was the best buying in five
Auckland Central.
9 $32,504,43863 $515,94392$121,156,000165 $734,27859August 2022 August 2022August 2022 August 2022 There was a 62% decrease in the total number of sales year on year. There was a 73% decrease in the total sales volume year on year. There was a 30% decrease in the total median sale price year on year.There was a 55% increase in the total median days on market year on year. August 2021 August 2021August 2021 August 2021 TotalSalesTotal Sales Value Median Sales PriceMedian Days On Market Market Statistics. Source: REINZ
10 ADDRESS BEDROOMS SALE DATE SALE PRICE 4B/54 LIVERPOOL STREET 2 29-JUL-22 $100,000 11J/23 EMILY PLACE 2 29-JUL-22 $590,000 305/135 VINCENT STREET 2 28-JUL-22 $368,550 S6-02/65 FORT STREET 1 28-JUL-22 $200,000 11H/16 GORE STREET 1 28-JUL-22 $151,000 905/1 PARLIAMENT STREET 1 28-JUL-22 $630,000 721/6 DOCKSIDE LANE 2 28-JUL-22 $200,000 3H/135 VICTORIA STREET WEST 2 27-JUL-22 $220,000 3102/10 COMMERCE STREET 3 26-JUL-22 $2,850,000 503/57 MAHUHU CRESCENT 1 26-JUL-22 $120,000 104/147 NELSON STREET 1 25-JUL-22 $440,000 8M/147 HOBSON STREET 2 25-JUL-22 $275,000 13C/2 EDEN CRESCENT 1 25-JUL-22 $320,000 3A/82 WAKEFIELD STREET 1 23-JUL-22 $57,000 8A/14 WATERLOO QUADRANT 1 23-JUL-22 $185,000 1A/32 EDEN CRESCENT 1 23-JUL-22 $258,000 703/70 SALE STREET 21-JUL-22 $820,000 1004/9 PRINCES STREET 3 21-JUL-22 $2,825,000 2605/10 COMMERCE STREET 1 20-JUL-22 $830,000 6K/14 WATERLOO QUADRANT 1 20-JUL-22 $75,888 407/77 HALSEY STREET 2 19-JUL-22 $318,000 10C/189 HOBSON STREET 2 19-JUL-22 $325,000 803/17 VOGEL LANE 3 19-JUL-22 $875,000 708/30 BEACH ROAD 1 18-JUL-22 $70,000 510/72 NELSON STREET 1 16-JUL-22 $168,000 121/85 CUSTOMS STREET WEST 1 15-JUL-22 $123,500 6A/44 LIVERPOOL STREET 2 15-JUL-22 $130,000 5B/22 BERESFORD SQUARE 1 14-JUL-22 $550,000 8D/15 CITY ROAD 1 14-JUL-22 $75,000 5B/26 LIVERPOOL STREET 2 14-JUL-22 $96,000 7E/22 QUEEN STREET 2 14-JUL-22 $750,000 804/141 PAKENHAM STREET WEST 2 13-JUL-22 $1,975,000 Recent Sales. AUCKLAND CENTRAL
11 Recent Sales. AUCKLAND CENTRAL ADDRESS BEDROOMS SALE DATE SALE PRICE 302/81 HALSEY STREET 1 13-JUL-22 $140,000 210/79 HALSEY STREET 1 13-JUL-22 $230,000 636/35 HOBSON STREET 2 13-JUL-22 $1,325,000 804/141 PAKENHAM STREET 0 13-JUL-22 $1,975,000 1601/1 PARLIAMENT STREET 2 13-JUL-22 $1,230,000 403/141 PAKENHAM STREET WEST 1 12-JUL-22 $1,010,000 8E/1 EMILY PLACE 1 12-JUL-22 $610,000 9A/1 EMILY PLACE 2 12-JUL-22 $680,000 414/57 MAHUHU CRESCENT 2 12-JUL-22 $180,000 501/145 NELSON STREET 1 11-JUL-22 $478,000 2C/105 ALBERT STREET 11-JUL-22 $430,000 4D/508 QUEEN STREET 1 10-JUL-22 $115,000 1505/430 QUEEN STREET 2 8-JUL-22 $350,000 704/47 WAKEFIELD STREET 1 8-JUL-22 $200,000 1108/72 NELSON STREET 1 7-JUL-22 $171,000 1408/72 NELSON STREET 1 7-JUL-22 $172,500 1212/10 WATERLOO QUADRANT 1 7-JUL-22 $213,000 327/57 MAHUHU CRESCENT 2 7-JUL-22 $215,000 421/149 NELSON STREET 2 6-JUL-22 $515,000 G03/147 NELSON STREET 2 6-JUL-22 $445,000 10B/189 HOBSON STREET 2 6-JUL-22 $300,000 11M/113 VINCENT STREET 1 6-JUL-22 $80,000 111/11 UNION STREET 2 5-JUL-22 $260,000 14/137 QUAY STREET 1 5-JUL-22 $75,000 1803/32 SWANSON STREET 2 4-JUL-22 $875,000 16/35 ALBERT STREET 1 4-JUL-22 $150,000 26B/16 GORE STREET 2 4-JUL-22 $230,000 6B/14 WATERLOO QUADRANT 4-JUL-22 $87,000 222/4 DOCKSIDE LANE 2 4-JUL-22 $205,000 205/132 HALSEY STREET 2 1-JUL-22 $2,460,000 PU2/22 NELSON STREET 1 1-JUL-22 $127,000 Sales data is from REINZ and covers the entire Central Auckland property market.
The Reserve Bank’s forecasts last week also predicted further falls in property values over the next 9-12 months, taking them back towards “sustainable levels” (albeit perhaps not truly affordable for more people). But there are also some more optimistic house price views starting to emerge, on the back of recent falls in mortgage rates, a reduced new supply pipeline, and the possibility of a change in government next year and potential reversal of housing tax changes.
In particular, fixed mortgage rates may not rise much (if at all), given a higher OCR is already ‘priced in’, and that the lending environment remains very competitive, with banks really focused on market share in a world where new lending flows are low.
There were no surprises that the Reserve Bank pushed up the official cash rate (OCR) to 3% last week, and reaffirmed a peak in this cycle of around 4%. However, they’re also envisaging that the inflation rate will start to drop soon, alongside no economic recession or large falls in employment. So the implications for the housing market from the latest decision, I think, are pretty muted.
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As a typical economist, I can see merit on both sides! But for now, it’s hard to see house price falls ending this year – because the rises already seen in mortgage rates mean that new borrowers can’t get as much money and existing borrowers also have to tighten up – however a floor is likely on the cards for 2023. A continuation of low unemployment remains key to that view though.
1. Official cash rate has further to rise, but mortgages not so much
Kelvin Davidson: Is it too early to call the end of house price falls?
3. Economy continues to bumble along For now, any risks of mass job losses still seem relatively low. Indeed, the economy continues to tick along, not surging, but also not going backwards – the NZ Activity Index (timely indicator for official GDP) grew by 0.8% in the year to July. This modest growth is underpinning jobs, and in turn, that’s also something of a backstop for the housing market.
2. Is it too early to call the end of house price falls?
4. Still lots of gain, but also a little more pain The CoreLogic Pain & Gain Report released last week showed that property resellers got a price higher than what they originally paid on about 98% of deals in Q2 2022, with a median resale profit of $370,000. These figures are clearly still high (often reflecting a typical hold period of 7-8 years), but they have started to weaken as the wider market drops. The ‘pain’ side of the equation, i.e. selling for less than originally paid, looks set to creep higher in the coming quarters, not necessarily due to a swathe of forced sales, but just due to unfortunate changes in personal circumstances (e.g. divorce) which mean properties need to be sold sooner than originally intended.
Kelvin Davidson is chief economist at property insights firm CoreLogic CoreLogic chief economist Kelvin Davidson: “There are some optimistic house price views starting to emerge.”
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5. Low lending flows and tight LVRs?
Looking ahead, the Reserve Bank will publish aggregated mortgage lending figures for July on Wednesday. Total lending activity across new loans, top-ups, and bank switches will have stayed pretty low last month, given we already know that property sales volumes were soft. But my interest lies with the breakdown by loan to value ratio (LVR) – high LVR finance dipped in June, and there hasn’t been much to suggest that banks eased up greatly over July (or into August). We’ll see what the figures show.
Photo / Peter Meecham
14 Announcement. When we started out, we ‘did’ apartments, and we’ve been ‘doing’ apartments really really well since. But our great city isn’t just full of apartments, its changing and so have we. We ouroutgrewname.
We are now Ray AucklandWhiteCentral Still completely passionate about apartments, but now recognising we sell quite a lot more. We are your Auckland Central & city fringe sales experts.
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City Realty has a strategic partnership with LoanMarket, to provide clients with the best mortgage advice and rates with brokers throughout our offices that provide Home Loans, First Home Buyers Loans, Construction Loans, Refinance, Selfemployed Loans and Vehicle Finance – whatever the loan, Loan Market can help. Our office achieved the No.4 Ray White office in the world for 2018 and the No. 2 Ray White office in New Zealand for 2018 and we do the highest volume of sales across all agencies in New Zealand.
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17 Based in the heart of Auckland City, Ray White Auckland Central is an award-winning agency in Auckland City that specialise in apartment sales for investment, luxury waterfront and Ourlifestyle.183+ dedicated professionals who understand this unique market, are all top performers who have contributed to our phenomenal results. As the Auckland central market continues to experience unprecedented growth, our Lorne Street & Wynyard Quarter offices are well positioned to maintain its leadership in the market. Why choose us?
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The marketing strategy is designed to reach the breadth of the active and passive buyer pool in the most effective manner, based on their Media consumption. marketing strategy comprises of 3 key components; property portals, social and multi-channel digital strategy and print media.
Our
A PASSIVETOMARKETINGCOMPREHENSIVESTRATEGYREACHACTIVE&BUYERS. 12 Marketing your home.
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There are 3 key portals, TradeMe Property, Realestate.co.nz and PropertyOneroof.co.nz.Portals
generally attract active byers in the market, OneRoof has a unique position as it reaches both active and passive property buyers due to the diversity of information it has on the platform including property listings, estimated property values, market news and commentary. It is important to run campaigns across all 3 to effectively cover the breadth of the active buyer pool and a part of the massive buyer market. None of the property portals have complete market coverage and each of these portals have a set of unique audiences.
Digital Marketing. Print continues to play an important role to cover the breadth of the market reaching quality and highly engaged audiences. It takes criteriabased search out of the equation with respect to the active market and is the most effective medium to reach the all important passive buyer market. This is clearly evidenced by the fact that the New Zealand herald has seen a massive 48% increase in its print readership over the last 18 months and average time spent reading the paper is over 50 minutes. The value of print is also well supported by agent feedback.
PRIMARILY PASSIVE & SOME ACTIVE BUYERS Print Media.
ACTIVE & PASSIVE BUYERS
PRIMARILY ACTIVE & SOME PASSIVE BUYERS
The Ray White City Realty Group has introduced a state-of-the-art digital solution that is powered by artificial intelligence to reach the breadth of the active and passive buyer pool across social media and multiple digital channels, including news and other high traffic websites. The programme is fully automated in the back end, it creates an audience segment of active buyers specific to the property as well as reaching the passive buyer pool. The campaign is structured to deliver quality leads for the property, and it auto optimises spend across social media and multiple digital channels, skewing the spend towards channels that are performing the best.
Property Portals.
20 SPECIALISTSSALESOUR Meet the team. Director AML OfficerManagerGeneral ManagerSales ComplianceManagerAuctionManagerHead Recruitmentof HorrobinDaniel VermaVikas CameronBrain BridgmanPauline RichardsMike BurkeAdam WilsonChas OperationsManager Jane Martin HuangAdy AileenWu Chris Guilford CaseyChen CairnsChris Craig Warburton DavidLee WorthingtonDom Dusan Valenta GibsonGillian Habeeb Urrahman HindanKhan Jean Ooi JeongLee John Min SALES TEAM - AUCKLAND CENTRAL OFFICE
21 YurakJudi Justin Choi GutierrezKeisha SamuelKrister Leo Zhu ZhangLisa Louise Stephens Marco Sahar MarkLi MayMa MichelleYurak ArmstrongNick OrielLynn Ryan Bridgman HuangSam Sean Ma Siming Zhou SteveKing SteveKirk VictorLiu Warren Thomas Our strongest team yet Selling right across Auckland Central & City fringe BoddeAndre DamianPiggin GalateanuGabriela BeliakMax SALES TEAM - WYNYARD QUARTER OFFICE SPECIALISTSSALESOUR
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