Ray White Auckland Central February Report

Auckland Central Market Report.

FEBRUARY 2024

Part of the group with a family factor.

CREATE RECOGNISE GROW

CITY REALTY GROUP

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Contents.

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04.

06.

Market Comment This upturn has Legs.

Article – Tony Alexander: Why NZ has suddenly gone dark on interest rate cuts

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10.

Auckland Central Statistics January 2024

Recent Sales January 2024

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14.

Auction Statistics & Update with Cameron Brain

Article – Catherine Smith: Hotel DeBrett building sells for $21m

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Property Management Market Comment

LoanMarket: All eyes on February 28th

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Marketing your property

Ray White Auckland Central & Wynyard Quarter

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Market Comment.

Ray White Auckland Central.

Daniel Horrobin.

City Realty Group Director

021 595 976 daniel.horrobin@raywhite.com 4

This upturn has Legs.

A NZ Herald quote on February 8 said: “House no one wanted a year ago is snapped up for $1.2m in just seven days”.

Director of City Realty Group, Daniel Horrobin, says: “This quote is not directly related to our Auckland City apartment market, but is symptomatic of a wider confidence from both sellers and buyers generally.

“Of the 15 auctions we have conducted in our Auckland Central office this year 12 have sold on the floor, a success rate of 80% under the hammer.

“We have more than 40 auctions (and counting) booked for the second half of February, a positive endorsement from sellers who sense the time for waiting is well and truly over.”

Government policy changes, such as promises to shorten the brightline test and to reinstate mortgage interest deductibility for investors, have no doubt contributed to a new-found confidence.

Also helping is commentary such as this, published on Stuff’s website on January 12: Squirrel chief executive David Cunningham said: “Home loan borrowers should see rates come down as much as a full percentage point over the next couple of months.

sharp fall in wholesale rates before Christmas,” said David, the CEO of one of the country’s biggest mortgage broking firms.

Closer to home, a statement by the CEO of Ray White NZ, Daniel Coulson on February 1 2024 provides further encouragement. “The number of completed sales across the Ray White group in January was 18.9% higher than 12 months ago.”

Rental demand continues to soar on the back of immigration.

Statistics NZ recently reported for the year ended November 2023: “There was an annual net migration gain of 127,400 (plus or minus 2500). That compared to an annual net gain of barely 11,000 in the November 2022 year.”

Daniel says: “We are delighted to begin 2024 on such a strong note and we look forward to the rest of the year with enthusiasm.” .

”Rates should already have dropped, given the

“Of the 15 auctions we have conducted in our Auckland Central office this year 12 have sold on the floor, a success rate of 80% under the hammer.

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Tony Alexander: Why NZ has suddenly gone dark on interest rate cuts Rate hike fears likely to slow the housing market revival.

ANALYSIS: For a while there things were looking good on the mortgage interest rates front. Optimism about falling inflation and easing monetary policy in the United States had caused some big falls in medium to long-term fixed rate borrowing costs around the world including here in New Zealand.

For instance, the cost to a New Zealand bank of borrowing in the wholesale markets at a fixed rate for two years fell from 5.6% at the end of October to 4.7% a month ago. As a result bank lending margins increased substantially, and we started to see some small cuts to lending rates of about 0.15%.

This was fairly miserly probably because our central bank would have been talking behind closed doors to the bankers telling them it would not be helpful to undermine still tight monetary policy by passing on this good news impact from the US market. Ample justification for this unseen pressuring by the Reserve Bank unfortunately hit us all last week and the outlook for interest rates is now not so good.

A central way by which tight monetary policy lowers inflation is via a worsening of the labour market. As people worry about their income, they cut back their spending and businesses lose their ability

The financial markets are pricing in another increase in the official cash rate, from 5.5% to 5.75%.

Photo / Fiona Goodall

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to easily pass on cost increases. But last week we learnt that rather than rising to 4.2% as the Reserve Bank had expected the unemployment rate only rose to 4% in the December quarter. Moreover, rather than growing just 0.2% in the quarter job numbers grew 0.4%.

In addition, central bankers in the United States have been warning investors not to be so optimistic about monetary policy easing there. The impact here has been a jump in bank borrowing costs, with the two-year wholesale bank borrowing costs is now around 5.2%.

Is this rise and similar increases for other terms enough to cause a round of increases in bank fixed mortgage rates?

Thankfully no. Because banks never got the chance to pass on borrowing cost reductions from November to January, they have fat in the system able to absorb the recent rise in rates.

This point is probably worth remembering because the financial markets are now pricing in one more increase in the official

cash rate, either on February 28, April 10, or May 22. If the Reserve Bank does raise the rate from 5.5% to 5.75% – and it probably won’t have to – then media commentary will be fairly shattering, and many people are likely to feel quite fearful of the damage which may come.

I’m optimistic that we will receive just enough information showing some easing in inflationary forces to avoid a final rate rise for this cycle. It pays to note for instance that the Household Labour Force Survey from which the unemployment and jobs growth numbers referred to above are derived has a history of rogue results.

The results in fact are at odds with other employment indicators which show greater weakness.

But the main thing to take away from the data is that for the first half of this year interest rates pressure on the NZ economy will remain firm and this will act to constrain not just our pace of economic growth through crunching retailers, but the initial speed of upturn in the housing market.

Tony Alexander: “For the first half of this year interest rates pressure on the NZ economy will remain firm.”

Photo / Fiona Goodall

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JANUARY 2024

Market Statistics.

Total Sales

Median Sales Price

January 2024

January 2024

January 2023

January 2023

There was a -53% decrease in the total number of sales year on year.

There was a -53% decrease in the total median sale price year on year.

Total Sales Value

Median Days On Market

January 2024

January 2024

January 2023

January 2023

There was a -67% decrease in the total sales value year on year.

There was a 1% increase in the total median days on market year on year.

30 65

$12,971,900 $39,714,100

$182,500 $390,000

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52.5

Source: REINZ 9

Recent Sales.

ADDRESS

BEDROOMS

SALE PRICE

SALE DATE

809/11 UNION STREET

1

$219,000

31-JAN-24

1002/145 NELSON STREET

2

$515,000

31-JAN-24

515/47 HOBSON STREET

1

$370,000

31-JAN-24

116/133 BEACH ROAD

1

$50,000

31-JAN-24

2201/74 ALBERT STREET

2

$500,000

30-JAN-24

8K/14 WATERLOO QUADRANT

1

$275,000

30-JAN-24

26/147 QUAY STREET

1

$120,000

26-JAN-24

11/8 DOCK STREET

3

$1,100,000

25-JAN-24

208/85 CUSTOMS STREET WEST

2

$165,000

25-JAN-24

15J/16 GORE STREET

1

$90,700

25-JAN-24

12F/14 WATERLOO QUADRANT

2

$103,000

25-JAN-24

11B/14 WATERLOO QUADRANT

1

$108,000

25-JAN-24

510/8 RONAYNE STREET

2

$102,000

25-JAN-24

208/85 CUSTOMS STREET WEST

2

$100,000

24-JAN-24

6/152 ANZAC AVENUE

1

$525,000

24-JAN-24

5/70 DALDY STREET

3

$2,320,000

22-JAN-24

4403/10 COMMERCE STREET

2

$2,050,000

22-JAN-24

107/47 HOBSON STREET

2

$713,000

19-JAN-24

1401/1 GREYS AVENUE

2

$1,150,000

19-JAN-24

7J/15 CITY ROAD

1

$85,000

19-JAN-24

6D/36 LIVERPOOL STREET

2

$125,000

19-JAN-24

24E/76 ALBERT STREET

2

$111,500

18-JAN-24

1106/138 ANZAC AVENUE

1

$48,200

18-JAN-24

1E/32 EDEN CRESCENT

1

$250,000

17-JAN-24

$258,000

12-JAN-24

$1,032,000

10-JAN-24

$200,000

10-JAN-24

319/72 NELSON STREET 1009/145 NELSON STREET

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1J/34 KINGSTON STREET

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AUCKLAND CENTRAL

110/77 HALSEY STREET

1

$125,000

9-JAN-24

612/30 BEACH ROAD

2

$107,000

8-JAN-24

5A/30 LIVERPOOL STREET

2

$54,500

5-JAN-24

JANUARY 2024

Sales data is from REINZ and covers the entire Central Auckland property market.

Total Sales

By number of bedrooms 1 Bed (or Studio)

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2 Bedrooms

13

3+ Bedrooms

3

Median Sale Price By number of bedrooms 1 Bed (or Studio)

$162,500

2 Bedrooms

3+ Bedrooms

$125,000

$1,100,000

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Building Success.

0 1 J A N UA RY 2 0 2 3 - 3 1 D EC E M B E R 2 0 2 3 Stats from all City Realty Group Offices

Total Number of Properties Listed

1211

Total Number of Auction Properties

381

Auction Success Rate:

% of Auction Properties Listed

31%

Non-Auction Success Rate:

65.94%

19.6%

Total Number of Sales for 2023

Total number of Auctions Sold in 2023

47% of all sales in 2023 were as a result of an Auction

Total Sales Value

Total Auction Sales Value

$282M

$89.8M

*Rounded to nearest $100,000

*Rounded to nearest $100,000

31.8% of the Total Sales Value was as a result of an Auction Sale

448

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Cameron Brain.

Auctioneer & Auction Manager

027 424 1782 cameron.brain@raywhite.com 12

City Realty Limited Licensed (REAA 2008)

Ray White Auckland Central Auctions in 2024:

Despite Long Weekends, Auction Activity Remains Robust.

As we bid farewell to January and February, the City Realty Group proudly announces a bustling start to the year, marked by a dynamic and active auction season. The numbers speak for themselves, with over 100 auction listings and 50 already successfully held auctions, achieving an impressive clearance rate of 60%.

The average number of bidders per auction stands at 3, resulting in a lively bidding atmosphere with an average of 19.24 bids per property. This level of engagement underscores the continued enthusiasm and demand within the real estate market, as buyers actively vie for their dream properties.

One notable trend is the remarkable popularity of auction properties, drawing four times the number of open home attendees compared to other methods of sale. This heightened interest reflects the transparency and competitive nature of auctions, creating an environment that resonates with both buyers and sellers.

The City Realty Group is pleased to report a consistent increase in open home attendees across the group, week by week, since the beginning of the year. This positive trend

signifies a growing and sustained interest in the properties we have on offer.

Looking ahead, we anticipate a vibrant and busy March, encompassing a diverse array of price points. The City Realty Group remains committed to delivering exceptional results for our clients and providing an unparalleled auction experience.

For those seeking more information about our auctions, please do not hesitate to reach out to Cameron Brain, our dedicated City Realty Group Auctioneer & Auction Manager. His expertise and guidance will ensure you are well-informed and prepared for the exciting opportunities our auctions present.

Here’s to a successful March filled with dynamic auctions and remarkable real estate opportunities!

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.

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Catherine Smith: Hotel DeBrett building sells for $21m Landmark Auckland watering hole snapped up.

One of Auckland’s landmark watering holes, the Hotel DeBrett building, has sold for $21 million.

The sale of the iconic site was revealed on social media by Colliers listing agent Blair Peterken, who brought the property to market in May last year.

“SOLD – The Iconic Hotel DeBrett Building – $21,000,000,” Peterken posted on LinkedIn. “Colliers has the privilege in announcing the sale of 2-4 High Street in Auckland CBD. It’s great to see some positive signs early in 2024.”

The 2854sqm property, which was snapped up by a “local buying group”, had been listed with neighbouring 23 Shortland Street, but a spokesman for Colliers said that property wasn’t part of the $21m deal.

The sales status of the 625sqm property at 23 Shortland was unclear at the time of publication.

Together they had been eyeing around $50m.

“This property drew interest due to its unique qualities, character, and the premium location of being in lower

The historic Hotel DeBrett building on the corner of Auckland’s High and Shortland streets has sold for $21m.

Photo / File

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Shortland Street. The purchaser is a local buying group.”

He added: “We have seen an increase in activity in the CBD during the past few months. The final quarter of 2023 and the first quarter of this year has brought some positive signs through greater buyer activity.”

The DeBrett Building has been a site for Auckland pubs and accommodation since 1841.

Remnants of the 1860s pub, known as the Commercial Hotel, are still visible in the current building, which was built around 1925.

The striking Art Deco doors are still a feature on High Street, retained after the hotel had a stylish refurbishment in 2008 that won it an architecture award in 2009.

When the property first hit the market last year, Peterken said the operator had expressed its long-term commitment to the site.

The property has other street-level hospitality and retail tenants, with Peterken noting in his listing that it generated an annual income of $1.431m plus GST. Peterken, and his co-listing agents Kris Ongley and David Burley, had flagged the development potential of both 2-4 High Street and 23 Shortland Street, pointing out it occupied a 1053sqm site zoned for business-city centre.

“The Business – City Centre Zone provides a host of options for the new owner to intensify the usage of the site,” Ongley said last year.

The bar made history in 1968 when women’s toilets were added as New Zealand’s famed ‘six o’clock swill’ came to an end and women were finally welcomed in the general pub, not just the house bar.

“The city centre is the top of the centres hierarchy and plays a pivotal role in Auckland’s present and future success.

The zone seeks to ensure the city centre is an international centre for business and learning, innovation, entertainment, culture, and urban living.”

In their marketing last year, the agents said the current tenants, a luxury boutique hotel, began a new 10-year lease in 2022.

According to OneRoof records, there was a $30.172m transaction for 2-4 High Street in 2019. Records also show a $10.1m transaction for 23 Shortland Street in 2020.

The refurbishment of the Hotel DeBrett, which features remnants of the 1860s Commercial Hotel, won an architecture award in 2009. Photo / Fiona Goodall

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Market Comment.

Property Management.

Superb.

SuperCity Property Management

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Release the equity!

A long standing client of Supercity who is now based overseas contacted us about reviewing and possibly increasing his portfolio.

A quick desktop valuation revealed considerable equity within his existing portfolio of residential investment properties. With the assistance of our friends at Loanmarket to arrange the mortgage broking and our apartment sales team at Ray White Auckland Central we have utilised this equity to help with the aquisition of a high yielding property without the need to put any additional cash into the deal.

He now has another positively geared income stream.

And he is one step closer to a financially secure retirement!”

HERES A QUICK LOOK AT THE NUMBERS Current Portfolio

Current Market Value

House divided > into 2 flats

$2,500,000

Current lending in this property

> $650,000

Increased the borrowing on this property to $850,000 to assist with acquisition of an additional unit nearby.

If you would like a review of your portfolio please feel free to reach out. You may also be able to add another income stream without the need for putting any cash into the purchase.

Jacque O’Connor Letting Manager and Business Development Manager

021 821 449 jacque.oconnor@raywhite.com 17

CO NT A

CT

ME

:

Jamie Maclennan

027 742 5227 jamie.maclennan@loanmarket.co.nz

All eyes on February 28th.

With an OCR Announcement coming up at the end of the month, we are seeing some banks & economists either picking a 0.25% increase in the OCR, while other view is that they will keep it the same - 28th of Feb is the day we will know for sure.

The confusion in these differing opinions stems from a number of factors, but a large factor has come in the last week or so where we have seen a sizable jump in the wholesale swap rates where it went from 5.33% to 5.71% in 7 days.

This volatility could likely play a significant factor in the Reserve Bank’s next announcement and has come off the back of lower than expected unemployment figures and stickier inflation rates both overseas and here in New Zealand.

We are currently seeing the most popular rates with clients being the 6 month to 1 year fixed rate (sometimes a blend of the two) as we now believe we are at or near the peak of the high-interest rate cycle.

Although we are saying we think we are at or near the peak, the 18 to 24 month rate are also reasonable options for those seeking a little more certainty in the form of time as well as cost.

Look out for our next update after we have had the announcement on the 28th!

To discuss the competitive investment loan options available speak to Jamie today.

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.

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Property Portals.

P R I M A R I LY A C T I V E & S O M E P A S S I V E B U Y E R S

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

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.

AC T I V E & PA S S I V E B U Y E R S

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.

Print Media.

P R I M A R I LY P A S S I V E & S O M E A C T I V E B U Y E R S

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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Why choose us?

We’re on the Up-and-up.

Based in the heart of Auckland City, Ray White Auckland Central & Wynyard Quarter are an awardwinning 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 Queen 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

Leaders in the Auckland Apartment & Residential market.

City Realty Limited (Licensed REAA 2008)

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Meet the team.

Daniel Horrobin Director City Realty Group

Cameron Brain

Pauline Bridgman

Mike Richards

Auction Manager

AML Officer

Sales Manager Auckland Central

Belinda Henson

Sales Manager Wynyard Quarter, Sandringham & Mount Roskill

OUR SALES SPECIALISTS

SALES TEAM - AUCKLAND CENTRAL OFFICE

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Ady Huang

Aileen Wu

Amit Rana

Ben Parkes

Bosen Han

Carl Russell

Casey Chen

Cheryl Whiting

Chris Cairns

Chris Guilford

Craig Warburton

Daniel Boderick

Danika Ansley

Derek Yin

Dom Worthington

Dusan Valenta

Gillian Gibson

Grant Elliott

Habeeb Urrahman

Holly Cassidy

Jeong Lee

Judi Yurak

Keisha Gutierrez

Krister Samuel

Kristine Liu

OUR SALES SPECIALISTS

Leo Zhang

Leo Zhu

Lisa Zhang

Marco Sahar

Michelle Yurak

Nick Armstrong

Ryan Bridgman

Sam Huang

Steve King

Steve Kirk

Our strongest team yet.

Selling right across Auckland Central & City fringe

Ross Tierney

S A L E S T E A M - W Y N YA R D Q U A RT E R O F F I C E

Andrew Bond

Ainsley Lewis

Louise Stephens

Max Beliak

Gabriela Galateanu

Jorvarn Hicks

OUR LOANMARKET MORTGAGE ADVISOR

Jamie Maclennan

W E C A N N E G OT I AT E A LO W E R R AT E . W O R K W I T H A QUALIFIED AND COMPETENT MORTGAGE ADVISER

LoanMarket Mortgage Adviser

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Create.

Recognise.

Grow.

The group with the family factor.

www.rwaucklandcentral.co.nz www.rwwynyardquarter.co.nz