Auckland Central Market Report.
Part of the group with a family factor.
FEBRUARY 2023
CITY REALTY GROUP CREATE RECOGNISE GROW
Contents.
04. Market Comment
06. Article – Tony Alexander: Signs that the housing market is pulling back from the edge
08. Auckland Central Statistics
12.
10. Recent Sales January 2023
14. Auction Statistics & Update with Cameron Brain
16. LoanMarket Update
18. Marketing your property
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Article – Catherine Smith: Auckland first home buyer scores apartment for $25,000
20. Ray White Auckland Central Meet the team
Market Comment. Ray White Auckland Central.
Investors active in Auckland’s central apartment market
Heightened demand from investors in Auckland’s central apartment market is continuing, says Director of City Realty Group, Daniel Horrobin.
“We’ve even seen some pre-auction offers and auctions brought forward,” Daniel says. “That happens when investors see an opportunity and move very quickly to secure it.
“Realistically, for most investors it is all about the price point and the return on their investment. Sales in the city apartment market are dependent on vendors being willing to meet the market.”
Daniel says some people are moving away from more traditional residential investment properties, being less confident of the capital gains many used to prop up their returns. “You are getting positively geared investment apartments, in some cases with net returns of 7% – 8% achievable.
“Ray White City Group has got a really positive auction pipeline going forward.”
Daniel says the rental market for Auckland central apartments is also quite strong. And it is continuing to strengthen even more with international students returning, more migrants flowing into Auckland and a huge number of students soon to return to university.
While rental statistics have been heavily influenced by New Zealand’s covid timeline, we can see a clear difference comparing rental availability in January 2023 to January 2021. In January 2021 (which was nearly a year after covid first reached New Zealand but while the country was still operating under the Level 1 to 4 alert system) there were 1,255 properties available to rent in the city centre. In January 2023 there were far fewer – 521. There is increased demand for AirBnb accommodation, being driven by tourists seeking short stay accommodation.
“Overseas visitors are holidaying in Auckland again, the cruise ships are back, and the city has been coming alive again.”
Ray White City Group’s licensed agents are well-versed in the specifics of the Auckland city apartment market and available to advise both sellers and buyers.
City Realty Group Director
021 595 976
daniel.horrobin@raywhite.com
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DANIEL HORROBIN
Tony Alexander: Signs that the housing market is pulling back from the edge
The shock of the Reserve Bank’s economic warning is starting to fade.
ANALYSIS: We are now more than two months down the track from November 23, when the Reserve Bank pushed the cash rate up a record 0.75 percentage points to 4.25% and warned of recession. In response to the bank finally pulling out the weapon of using scary words, we saw business and household sentiment measures fall away and housing market indicators get worse.
But as anyone who has raised children knows the shock impact of strong words fades over time and that is something we can see in three of my coalface surveys. My monthly survey of mortgage advisers with mortgages.co.nz showed three weeks ago that a net 13% of brokers were seeing fewer first home buyers coming in asking for advice.
This was better than the net 17% of December but still a lot worse than the 13% in mid-November who were seeing more
first home buyers, let along the high net 48% of September and October. There has been a similar easing in pessimism regarding investor clients, though all the numbers have been far worse than for young buyers ever since the tax changes announced in March 2021.
Then there is my monthly survey of property investors undertaken with Crockers Property Management. Two weeks ago, a net 0% said they planned making a new purchase in the coming year. In December that reading was -5% from 1% in November and 2% in October. The shock has passed but the sentiment for investors remains as poor as ever.
Interestingly though, the proportion saying that their major worry is falling house prices has eased to 6.6% from 7.8% soon after the Reserve Bank’s extra tightening and 6.7% before November 23. The change does not
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The outlook for the housing market is grim, but not catastrophic. Photo / Ted Baghurst
for a moment bespeak of a housing market upturn – just a backing away from the edge.
Then there is my monthly survey of real estate agents undertaken with REINZ. The survey is underway at the moment but the results so far from almost 500 agents again show a pulling back from the edge. But things are still overwhelmingly weak.
For instance, whereas in late-October a net 15% of agents said more first home buyers were in the market that fell to a net 16% seeing fewer at the end of November. The reading now is close to zero. The shift for investors is similar though the numbers are all much worse. Auction attendance remains very bad, but open homes seem to be attracting some more people.
Pulling back from the edge is not the same as turning direction for the better and almost across the board the various indicators in my surveys tell us that the outlook for house sales and prices in the
first half of this year remains poor. The same implication for the economy overall can be made from the other surveys in hand showing business and consumer sentiment falling to record low levels after November 23.
But again, those surveys are also showing things pulling back from the edge to levels which are appalling rather than catastrophic.
For cashed-up home buyers, the situation is the best in a generation: listings are 37% ahead of a year earlier, investors are absent, FOMO is gone, and more and more vendors are (surely) getting realistic in their price expectations. It will be interesting to see how quickly buyers return once interest rates are moving down and expected to keep falling away more than has been the case recently for some lenders’ 3-5 year fixed rates.
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- Tony Alexander is an independent economics commentator. Additional commentary from him can be found at www.tonyalexander.nz
Independent economist Tony Alexander: “While prices are going to head lower still into winter 2023, the worst of the decline is behind us.” Photo / Fiona Goodall
JANUARY 2023
Market Statistics.
Total Sales
January 2023
54
January 2022
There was a -30% decrease in the total number of sales year on year.
January 2023
$345,000
January 2022
Total Sales Value
January 2023
$28,114,800
January 2022
77 $51,635,800
There was a -45% decrease in the total sales value year on year.
$420,000
There was a -17% decrease in the total median sale price year on year.
Median Sales Price Median Days On Market
January 2023
57
January 2022
86
There was a -33% decrease in the total median days on market year on year.
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Source: REINZ
Recent Sales.
ADDRESS BEDROOMS SALE PRICE SALE DATE 3J/16 LIVERPOOL STREET 1 $255,000 31-JAN-23 2F/2 WHITE STREET 1 $50,000 31-JAN-23 903/79 AIREDALE STREET 0 $710,000 31-JAN-23 4001/10 COMMERCE STREET 3 $3,900,000 31-JAN-23 503/36 EDEN CRESCENT 2 $295,000 31-JAN-23 60/145 QUAY STREET 1 $150,000 28-JAN-23 104/70 SALE STREET 1 $650,000 27-JAN-23 421/149 NELSON STREET 2 $560,000 27-JAN-23 11A/147 HOBSON STREET 4 $395,000 27-JAN-23 3P/99 CUSTOMS STREET 2 $350,000 27-JAN-23 1410/76 WAKEFIELD STREET 2 $600,000 27-JAN-23 12D/100 ANZAC AVENUE 2 $570,000 27-JAN-23 8I/147 HOBSON STREET 2 $250,300 26-JAN-23 224/133 BEACH ROAD 1 $34,500 26-JAN-23 18/146 FANSHAWE STREET 1 $220,000 25-JAN-23 2B/8 WHITE STREET 2 $158,000 25-JAN-23 421/6 DOCKSIDE LANE 2 $190,000 25-JAN-23 11L/113 VINCENT STREET 1 $95,000 24-JAN-23 3F/132 VINCENT STREET 2 $660,000 24-JAN-23 141 PAKENHAM STREET 2 $2,750,000 24-JAN-23 9D/31 DAY STREET 2 $145,000 23-JAN-23 807/149 NELSON STREET $538,000 23-JAN-23 1A/508 QUEEN STREET 1 $85,000 23-JAN-23 1301/10 WATERLOO QUADRANT 1 $205,000 23-JAN-23 1211/41 BEACH ROAD 2 $1,115,500 22-JAN-23 508/77 HALSEY STREET 1 $150,000 20-JAN-23 204/83 HALSEY STREET 1 $505,000 20-JAN-23 205/83 HALSEY STREET 2 $690,000 20-JAN-23 808/32 SWANSON STREET 2 $750,000 20-JAN-23 102/8 RONAYNE STREET 2 $86,500 20-JAN-23 119/145 NELSON STREET 2 $455,000 19-JAN-23 207/17 VOGEL LANE 1 $199,000 19-JAN-23 1705/79 AIREDALE STREET 1 $495,000 19-JAN-23 5M/23 EMILY PLACE 1 $350,000 19-JAN-23 6E/147 HOBSON STREET 2 $260,000 18-JAN-23 2H/20 PAKENHAM STREET 3 $280,000 18-JAN-23
AUCKLAND CENTRAL
22 1 Bed (or Studio) Total Sales 24 2 Bedrooms 4 3+ Bedrooms By number of bedrooms $220,000 1 Bed (or Studio) Median Sale Price 2 Bedrooms 3+ Bedrooms By number of bedrooms $538,000 $751,000
Sales data is from REINZ and covers the entire Central Auckland property market.
ADDRESS BEDROOMS SALE PRICE SALE DATE 1901/10 COMMERCE STREET 2 $2,055,000 18-JAN-23 414/133 BEACH ROAD 1 $34,500 18-JAN-23 G07/57 WAKEFIELD STREET 2 $565,000 17-JAN-23 1501/8 ALBERT STREET 2 $980,000 17-JAN-23 224/125 CUSTOMS STREET WEST 2 $305,000 16-JAN-23 1409/30 BEACH ROAD 2 $60,000 13-JAN-23 210/133 BEACH ROAD 1 $35,500 13-JAN-23 205/1 GREYS AVENUE 1 $545,000 12-JAN-23 2F/2 EDEN CRESCENT 1 $340,000 12-JAN-23 220/57 MAHUHU CRESCENT 0 $187,000 12-JAN-23 702/149 NELSON STREET 1 $310,000 11-JAN-23 6B/1 EMILY PLACE 1 $330,000 10-JAN-23 11F/36 DAY STREET 2 $620,000 9-JAN-23 318/149 NELSON STREET 2 $516,000 9-JAN-23 1202/152 HOBSON STREET 3 $1,108,000 9-JAN-23 502/22 NELSON STREET 1 $505,000 9-JAN-23 304/138 ANZAC AVENUE 1 $42,000 4-JAN-23 713/438 QUEEN STREET 1 $425,000 1-JAN-23
JANUARY 2023
Catherine Smith: Auckland first home buyer scores apartment for $25,000
A two-bedroom apartment in downtown Auckland sold under the hammer last week for $25,000 – one of the best buys of the year.
The 75sqm leasehold property on Beach Road sold to a young first home buyer bidding over the phone.
Ray White agent Dominic Worthington, who marketed the apartment with Ady Huang, said it was a “laborious” auction, but “we got over the reserve”.
“We set it something like three days before hand, that’s when you have the meaningful conversations with the vendor – with some gnashing of teeth and hand-wringing,” he said.
“In the auction, we always go back and check with the vendor ‘you comfortable’? We got a few thousand over the reserve.”
The property had a 2021 CV of $350,000.
Worthington told OneRoof that the vendor had owned the sixth-floor apartment in the Scene One block for 15 years.
He said the property had attracted multiple calls from interested buyers and there were six registered bidders after a solid threeweek marketing campaign.
“That’s a good market, it wasn’t a halfhearted attempt, it got out to the widest market.”
The north-facing apartment is in a block which Worthington described as having “a unique risk profile”, meaning it needed remediation.
He said last year, before a remediation plan was in place, sellers had got as little as $5000, but now that the body corporate has a design and plan underway buyers knew what they were up for. A confidentiality agreement with the body corporate forbids him from mentioning what that cost might be to an owner.
Worthington said the apartment’s annual outgoings for leasehold, body corporate fees and rates was around $28,000, or just under $540 a week.
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An apartment in the Scene One block on Auckland’s Beach Road sold at auction for $25,000.
“That’s cheaper than the rental on a twobed, two-bath apartment. People see ‘I can buy this, I’m not encumbered by a massive mortgage’.”
He noted a flow into the city by first home buyers frustrated by suburban residential prices where vendors are still stuck expecting “yesterday’s prices”.
“It’s not the luxury end, but buyers can spend anywhere between $25,000 and $625,000, that’s the sweet spot. It’s better than a year ago,” he said.
Worthington and Huang are bringing another leasehold property to auction next week - a three-bedroom terrace house at 7 Dovedale Place, in Parnell. The property, which has ground rent, rates and body corporate fees of $30,000 a year, is expected to sell below CV.
Daniel Horrobin, director of Ray White City Group, said that his agents were definitely seeing a return of investors to the inner-city apartment market this year.
“One of the trends is that the capital growth is not there, so investors are looking for yields,” he said, adding it has been a while since yields have reached 7% to 7.5%.
Those numbers have been encouraging savvy investors back to buying, some not put off by the need for remedial work on
some apartment blocks, and encouraged by high demand from renters.
“We’ve run out of properties to let – it’s been a while. The city is coming back to life and people want to live back in the city for the lifestyle,” he said. Recent viewings for apartments on Queen Street and Nelson Street had between 20 and 50 groups through. This summer tenants were a mix of young professionals, and both local and international students.
Horrobin said savvy buyers are shopping in the $400,000 to $450,000 “sweet spot” price range, helped by vendors who are prepared to meet the market with their price.
He said first home buyers are doing the math, too, buying apartments for as little as $350,000 to get a foothold in the city lifestyle.
The sales environment in Auckland has altered substantially in the last 12 months. REINZ figures for January show that residential sales in Auckland in January dropped 29% year on year to 943 - the lowest number of monthly sales in the city since records began. Days to sell for Auckland in January rose to 51 last month while the city’s median sale price was down 21.&% year on year to $940,000.
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For sale: A three-bedroom terrace house at 7 Dovedale Place, in Parnell, Auckland, goes to auction on February 23.
Auction updateAuckland Central
Our Auction business has started strong in 2023
Our first Auction was held on the 17th of January 2023, which was a little earlier than predicted. And with a number of scheduled auctions being brought forward, there is a good indication that buyers have also started the year wanting to transact.
Our Auctions since then have been active with multiple bidders on most properties. Our clearance rate remains around 50%, with many of the properties that have not sold, either in negotiations, under contract or priced well to sell.
There has been a mix of investors, speculators and first-home buyers in attendance and participating on the auction floor.
Here at Ray White City Realty Group, we are looking forward to a very busy 2023 auction year.
If you would like to discuss anything about the Auction Process or Why should you Auction, I would welcome the opportunity to discuss this with you.
Auctioneer & Auction Manager027 424 1782
cameron.brain@raywhite.com
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CAMERON BRAIN
4.99% Fixed For 12 Months Limited Time Only Why use a Loan Market mortgage adviser? I have access to over 25 banks and lenders, so with greater choice comes a better deal for you But best of all you get the industry knowledge and financial expertise at no cost to you, I am paid by the lender that we do business with. On offer from one of the MAIN BANKS. Available for finance, refinance and restructure. if you would like to know more then talk to me today. T’s and C’s apply. Craig Pettit 027 249 0010 CON ME:
Marketing your home.
A COMPREHENSIVE MARKETING STRATEGY TO REACH ACTIVE & PASSIVE BUYERS.
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.
Our marketing strategy comprises of 3 key components; property portals, social and multi-channel digital strategy and print media.
Property Portals.
PRIMARILY ACTIVE & SOME PASSIVE BUYERS
There are 3 key portals, TradeMe Property, Realestate.co.nz and Oneroof.co.nz.
Property 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
Digital Marketing.
ACTIVE & 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
Print Media.
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.
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.
PRIMARILY PASSIVE & SOME ACTIVE BUYERS
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.
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Ray White Auckland Central.
Why choose us?
We’re on the Up-and-up.
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 lifestyle.
Our 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.
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, LoanMarket 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.
0800 002 420
www.rwaucklandcentral.co.nz
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City Realty Limited (Licensed REAA 2008)
Leaders in the Auckland Apartment & Residential market.
Meet the team.
SALES TEAM - AUCKLAND CENTRAL OFFICE
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SALES SPECIALISTS
Jean Ooi Jeong Lee
OUR
Director AML Officer
Sales Manager Auckland Central
Auction Manager Sales Manager Wynyard Quarter
Daniel Horrobin Cameron Brain Pauline Bridgman
Mike Richards Belinda Henson
Operations Manager
Jane Martin
Ady Huang Aileen Wu Chris Guilford
Casey Chen Chris Cairns
Craig Warburton David Lee Dom Worthington Dusan Valenta Gillian Gibson
Habeeb Urrahman Iona Rodrigues
John Min
OUR LOANMARKET MORTGAGE ADVISORS
WE CAN NEGOTIATE A LOWER RATE. WORK WITH A QUALIFIED AND COMPETENT MORTGAGE ADVISER
Our
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Judi Yurak Keisha Gutierrez Krister Samuel Leo Zhu Lisa Zhang
Louise Stephens Marco Sahar
Mark Li
May Ma
Michelle Yurak
Nick Armstrong Ryan Bridgman Sam Huang Siming Zhou Steve King
Steve Kirk
strongest team yet Selling right across Auckland Central & City fringe
Max Beliak
SALES TEAM WYNYARD QUARTER OFFICE
OUR SALES SPECIALISTS
Andrea Manni
Victor Liu
Malcolm Low Hayley Paul Gabriela Galateanu
LoanMarket Mortgage Adviser LoanMarket Mortgage Adviser
Craig Pettit Laurie Warren
Create. Recognise. Grow. The group with the family factor. www.rwaucklandcentral.co.nz
