The median price for residential property across New Zealand increased slightly in September compared to the previous month and also increased annually, according to the Real Estate Institute of New Zealand (REINZ).
The country’s median price for residential property increased by 1.4% from $800,000 in August 2022 to $811,000 in the subsequent month of September. This resulted in a 2.0% increase in median price annually, from $795,000 to $811,000.
The fact that Auckland was in Level 4 lockdown for three weeks of September 2021 should be noted, seeing that affects comparisons and figures overall.
Auckland’s sales volume was up 15.8% on September last year from 1,410 to 1,633, with sales volumes also up 7.6% on August 2022.
One factor influencing annual median prices is the larger number of sub-$1 million properties being sold, especially in our largest regions containing big cities. Eleven of the country’s 16 regions are showing an increase in the sale of properties in this price bracket. Auckland and Wellington reflected this trend strongly, with an additional 8.6% and 8.9% sales in the bracket respectively, in September 2022 compared to September 2021.
This move towards sales of under-$1 million properties helped influence Auckland’s median price decrease of 8.3% compared to September last year, down from $1,140,000 to $1,045,000. In September 2022 Auckland recorded a 5% month-on-month decrease in median price when compared to August 2022.
Agents in some areas report there are more first home buyers in the market, enticed by easing prices and less competition. Overall, there’s been less investor activity as a result of policy changes such as the axing interest cost deductibility.
There is also significantly more stock for first home buyers and other home seekers to choose from compared to last year. Back then, demand exceeded supply creating a sense of urgency and increased competition. Stock levels nationally were up 93.2% compared to September last year and in Auckland were up 73.4% compared to September last year.
It’s not surprising then that nationally, the median number of days to sell (DTS) a property in September was 47, whereas it was a median of 37 days in September 2021. Drilling down on Auckland, the median days to sell in September 2022 at 45 days was up nine days compared to September 2021 and up three days compared to last month.
Properties which are marketed well are selling faster, able to stand out from other stock. Auctions continue to drive stronger results with lower days on market as compared to other methods of sale. They continue to attract serious buyers, with those buyers who can only buy conditionally now being successful in the days post-auction.
At the Ray White City Realty Group, we have seen a strong auction clearance rate of 64.76% Year to Date from January - September 2022. Furthermore, Ray White nationally has seen an increasing level of success with the auction clearance rate reaching 58.3% last week and properties sold through the auction process achieving a 9.19% higher sale price than the previous highest offer.
As we move into the warmer months, agents report seeing an increase in open home and auction attendance. They are confident activity will pick up as people move to complete their plans to buy or sell ahead of the summer holidays.
For vendors motivated to sell, they should seriously consider advice from one of our team of professionals who have in depth knowledge of demand by area and understand market sentiment.
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Most innovative marketing real estate business in New Zealand.
Our enviable position comes from an unwavering commitment to marketing and auctions - whether that be safely onsite or in-room.
In August, Ray White New Zealand had 1,532 live listings, up 14.24 per cent on last year, while the number of sales was down 21.79 per cent year on year.
Last month, Ray White New Zealand had 426 properties scheduled to go to auction, leading to an all-sold clearance rate of 46.8 per cent.
Our approach to the ‘method of sale’ of your property is aligned with our marketing methods of creating competitive situations between buyers to create the best outcomes for our vendor clients.
We have never lost faith in the value we can bring our vendors in a challenging market through effective marketing. If you choose to sell, we will be suggesting an investment in marketing as we believe it enables us to maximise competition and clearly illustrates your intent to sell and therefore attracts genuine buyers. We appreciate that some people would prefer to sell quietly or off-market. While this is not a normal recommendation, we welcome discussion on all opportunities to take your property to the market.
Being one of the largest real estate groups in the country has direct advantages for our sellers. Our ability to target the largest pool of buyers within a campaign is a strength that you can be confident will assist us in delivering the best possible result for you. In the current market conditions, it’s critical to target the broadest possible audience and to be as efficient as possible in tailoring appropriate messaging to your potential buyers. After all, our focus is to seek out the buyer for your property that will pay more than everyone else.
We do this by having the greatest number of relationships with buyers in the market today. Combine our relationships with our use of technology; we can engage with buyers on a level that will ensure we can find the premium buyer for your property.
In addition to our ability to target broad audiences, Ray White Concierge, our communication specialists, unique to Ray White, can target one of the most influential audiences, our local communities. Our 120 years of real estate experience enables us to understand that a catalyst for creating competition is leveraging the local community. Our data shows that up to 60 per cent of property purchasers come from neighbours and their friends in some cases.
Ray White Concierge can communicate to property owners in surrounding streets, positioning your property to ensure it is at the centre of our communities’ attention. Our dedicated team of 100+ Ray White Concierge specialists, in coordination with our appointed agent, can deliver a layered community communication program including telephone calls, SMS and email, ensuring that the most influential people are alerted early to the sale of your property.
As Australasia’s largest real estate group, we are supported by a dedicated and highly experienced team of newshounds in our PR team who work seven days a week. The team excels at winning “earned media”, the exposure that money cannot buy; it must be earned.
Our media exposure dominates all other brands in terms of publicity - which is the sweet spot. Our profile in newspaper advertising and editorials, along with a large number of listings on oneroof.co.nz, realestate.co.nz and trademe.co.nz/property - is also huge.
To put a price on the power of our media coverage, in August, Ray White New Zealand achieved more than $2,074,880 worth of earned media mentions in print, online, radio and TV, according to iSentia, our media intelligence agency, with a potential reach of 12,029,564 people, more than double the population of New Zealand. That’s free publicity for the group and all its members.
Our experienced in-house journalists can get your property the exposure that money can’t buy.
When a home is listed with Ray White, our clients are introduced to the national public relations service; a team that’s plugged into the New Zealand media and has the sole focus of achieving more exposure for the properties we sell to the audience that matters most.
In times of uncertainty, property sellers need facts, not media speculation, to create informed decisions. Whether that be a decision to list your property on the market or be in touch with real-time market conditions. The reliance on data and proof points has never been more important for good decision making.
As the most successful real estate group in Australasia, we have access to the largest pool of up to date information available and have the experience to help you analyse relevant data to help you make the right decision.
With the summer market nearly upon us, auction results continue their strong surge towards Christmas. September saw an auction success rate of 49 per cent nationally. While down on the dizzying heights of 2021, this is still considerably higher than many offices’ private treaty success rates. 353 auctions conducted for the month is 19 per cent higher than last month and a pleasing 26 per cent up on September last year. An average of 2.4 registered bidders per auction sees this number continue to climb each month, showing that despite official cash rate increases and changes to lending, buyers now see the current market as the perfect time to purchase.
Method of sale has become more important than ever, with auctions average days on market sitting at 28, while private treaty was 50.5 days in September. Agents and offices diligently using the auction process are rewarded with fewer days on market and capacity for new business.
This article was first published on OneRoof.co.nz and is published here with permision
ANALYSIS: For over two months I have been noting the return to the residential real estate market of first home buyers. We can easily see this in my monthly surveys of mortgage advisors and real estate agents. For instance, in my monthly survey of mortgage brokers a net 47% most recently have said that they are seeing more first time buyers in the market. A net 27% of real estate agents also say that they are seeing more first home buyers.
But are we seeing more investors in the market? Each of my five monthly surveys gives some insight into what investors are doing and collectively while they show investors are becoming a little bit more interested in the market none of them are truly showing that the investors are coming back.
A net 5% of mortgage advisors a few weeks ago said that they are seeing fewer investors coming forward looking for advice. This was, however, better than the net 33% four weeks earlier and was the least negative outcome since the start of 2021.
A net 28% of real estate agents still say that they are seeing fewer investors. This is an improvement from 34% at the end of August and the least negative result since February 2021. But it is still firmly negative.
My monthly survey of consumers in general has shown reasonably consistently since March this year a net 10% of people planning to cut back on their purchases of investment property. There is no improving trend underway.
But my two other monthly surveys, which focus specifically on investors, do show some greater degrees of interest. The monthly survey of portfolio investors which I run with Sharesies most recently showed a net 17% of respondents planning to increase their purchases of residential property. This
was up from 15% a month earlier and the strongest result since the survey started in October last year.
And finally, the monthly survey of existing residential property investors which I run with Crockers Property Management last month showed a net 10% planning to increase their property purchases. In the previous month a net 1% were still planning to cut back on their property holdings.
The surveys do not in my opinion add up to a case for saying that investors are coming back into the market so that their new buying exceeds their new selling. But it does look like they may be paying interest in the reports of first home buyers at least starting to take advantage of the doubling in listings from a year ago and the strong fall in prices from the peak of late 2021.
One interesting thing to keep an eye on will be whether the shift away from left-leaning candidates in local body elections will be considered as a strong indication of what is likely to happen in the general election late next year. If people believe a shift away from the left in New Zealand truly is underway, then this may encourage some investors to do what the first home buyers are doing and take advantage of vendors increasingly willing to meet the market.
This is because the National Party have said that they will reverse all the tax increases which have been imposed and are set to be imposed by Labour (and the list of them seems to keep growing). The most important one here is Labour's removal of the ability of residential property investors to deduct interest expenses when calculating their taxable income.
- Tony Alexander is an independent economics commentator. Additional commentary from him can be found at www.tonyalexander.nz
This article was first published on OneRoof.co.nz and is published here with permision
ANALYSIS: On average each year in New Zealand about 80,000 houses are bought and sold around the country. This is about 4.4% of the total housing stock and means that for the vast majority of people the sometimes large ups and downs of house prices are irrelevant. So why do we pay so much attention to what is happening in the housing market?
Mainly it is because we consider more wealth to be better than less. If house prices are rising, we feel richer, potentially more clever and pleased with ourselves, happier about our ability to fund our retirement by downsizing if necessary, and perhaps we like a reason to justify spending up large on a holiday or new furniture.
But for those of us who made our first purchase before governments told us we needed to build wealth for retirement because national superannuation might not be affordable one day, lifetime wealth accumulation was not really the motivation. Our focus was on securing a home in which to raise a family. We wanted something not too far from our workplace, perhaps with some outside space for playing, gardening, and hanging the washing.
When we talked about getting a foot on the property ladder it was in the context of starting small, then later upgrading to account for more children and a higher income further up the work ladder. These days it seems more to refer to outright building of a
financial wealth portfolio and avoiding missing out on wealth accumulation being enjoyed by others.
This is a problem for current first home buyers right this moment because of the stage which our housing cycle has just reached. Currently there is a dominant focus on how much further prices have to fall after already declining 10.4% from their nationwide peak last November. Auckland prices are down 16%. The common expectation is that prices will decline maybe another 5%. After that it seems the prevalent view is things will sit flat for an extended period of time. Actually, I expect rises of 5% - 10% in 2023.
If you are a first home buyer and your focus is on wealth growth, then you think you are incentivised to hold off until prices have bottomed. This is a dangerous strategy easily challenged in two ways.
First, as a newbie in the investment field you won’t yet have learnt a key lesson the experienced investors have. Don’t try to pick the tops and the bottoms. You’ll feel far worse waiting too long and missing either than taking advantage of the large number of people on the other side of the transaction giving you the ability to pick and choose.
That is, you sell when markets are exceptionally frothy and there is no trouble finding a buyer who sets no conditions for the lesser quality asset you might want to sell. You buy when there are a high
number of sellers, you can use each as a bargaining chip against the others, and you can pick and choose the best quality assets with greatest long-term or yield growth potential.
My monthly survey of real estate agents undertaken alongside REINZ has just shown that 45% of investors looking to make a purchase are motivated by hopes of finding a bargain, up from 30% in February. The smallest net proportion of agents are seeing investors standing back from the market since September last year.
Second, if your focus is where it should be on securing a home rather than the first housing asset for your portfolio, then where the market sits right now, potentially even this month, is as good as it is going to get for a very long time.
You can pick up a property for as much as 15%20% less in Auckland than you would have paid late last year. In Auckland you have 80% more houses to choose from than a year ago, outside of Auckland almost 130% more. Vendors have likely reached their point of capitulation to market reality, with a recent ASB survey showing a net 31% of people expect prices to fall further (28% in Auckland). This survey is not a good predictor of what will happen, but it does in this instance allow us to say vendors have almost certainly lost faith in any belief that waiting will yield a better price.
Should you try and be clever and hold out for the final 5% of price declines? Consider this. Have you ever heard your parents or grandparents bemoan the fact they bought their first house for $65,000 but had they waited three months could have got it for $61,750?
So, are first home buyers in fact starting to focus on the new opportunity to secure a home? Maybe. My latest survey of real estate agents shows that for the first time since September last year more agents are seeing increased numbers of first home buyers than decreased numbers. Last month a net 36% were seeing fewer. Things may be changing very quickly amongst first home buyers and if you have a misplaced focus on getting your first housing asset at the bottom of the price cycle rather than your first owned home, then the clock is ticking against you.
My survey with REINZ shows that worries about high interest rates, access to finance, and even falling prices, are all abating. It also shows numbers attending open homes rising for the first time since February 2021. The housing cycle has now entered the preparatory phase for turning back upward.
- Tony Alexander is an independent economics commentator. Additional commentary from him can be found at www.tonyalexander.nz
Ray White Parnell is based at the heart of our communities who form Auckland’s historic boutique suburbs. We are a team of dedicated professionals who understand this unique market and are experienced in all property typeswhether it’s for a family home, landmark property, city lifestyle or investing. As the surrounding suburbs remain a destination of choice for lovers of art, history and proximity to city life we are in the right location and the right frame-ofmind to provide market leading advice with a focus on people.
We are a part of the City Realty Group which is one of the largest Ray White franchise groups in New Zealand with offices in Central Auckland.
We encourage a unifying atmosphere where opportunities are created, individuals are recognised and everyone grows - from our team to vendors, buyers, investors, property owners and tenants. Our experienced and established team service many aspects of the Auckland City market - from rental apartments to luxury penthouse sales and from the classic family home to an epic waterfront estate. Also on offer are dedicated property management and marine brokerage teams.
The City Realty Group also has a strategic partnership with Loan Market connecting our clients with experienced brokers to provide home, construction and refinancing loans with some of the best market rates.
We are all about open doors and open minds.
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