PHOTO: Auckland. FILE
Several Auckland real estate agents report that the housing market in the Super City has reached its lowest point in terms of activity and pricing, with one agent noting, “the tides are finally turning.”
However, industry insiders remain cautious.
In June, the median Auckland house price rose 2.7% to $1.05 million compared to the previous month and increased 4.8% year-on-year, according to figures from the Real Estate Institute of New Zealand (REINZ). However, the number of properties sold in Auckland in June was down 33.3% from May and 35.1% year-on-year.
Meanwhile, CoreLogic’s latest Pain and Gain report showed that 44% of Auckland apartment sales in the second quarter of the year were for a loss.
Harcourts North West’s Diego Traglia, who heads a team of real estate agents and features on the reality TV show Rich Listers, said a surge in buyer activity over the past couple of weeks has led him to believe the market has turned a corner.
Traglia reported multiple offers on properties that had been languishing on the market for months. For example, a section in Laingholm, which had been on the market for about six months without any interest, suddenly received two offers, one of which was cash unconditional. Additionally, two five-bedroom, three-bathroom homes in Hobsonville received multiple offers within the past couple of weeks.
Traglia and Barfoot & Thompson’s Stephen Barfoot said vendors are currently more willing to meet the market in terms of price.
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Traglia also observed an increase in activity in the townhouse market, with a two-bedroom townhouse in Glen Eden receiving a three-way multi-offer after weeks of no interest. He noted that investors and developers are returning to the market, hoping to pick up bargain properties.
In a recent email to clients, Traglia said, “After months of uncertainty and stagnation, the real estate market has reached its lowest point. And now with the surge of activity observed over the past fortnight, I’m calling it—prices are poised to commence the rise of the upcycle.”
Barfoot & Thompson director Stephen Barfoot is also optimistic about the Auckland housing market. In July, traditionally the slowest month of the year for sales, the company sold 902 homes, 25% more than in the same month last year. Barfoot attributed this increase to a combination of vendors being prepared to meet the market and anticipation that prices may be at their low point given recent movements in mortgage interest rates.
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Despite July’s median sale price of $970,000 being lower than the median for the three months prior, it was 2.1% higher than last July’s median. Barfoot noted that lower inflation numbers and the promise of further interest rate cuts led to increased confidence among buyers, resulting in the reappearance of multi-offers across the network.
Ray White reported that buyers were “out in force” at auctions in the week beginning July 29, with 126 properties scheduled to go under the hammer, averaging 3.5 active bidders per auction.
CoreLogic chief property economist Kelvin Davidson said it might be too early to say for sure whether the Auckland market has begun a true turnaround. He emphasized that turnarounds always start somewhere, but it’s not going to be an immediate shift.
Davidson mentioned that increased buyer activity could be attributed to a seasonal upturn, as sales typically pick up in August. He also pointed out that while interest rates have started to come down, rising unemployment could temper market improvements.
Trade Me Property customer director Gavin Lloyd echoed this sentiment, saying, “it’s a very hard time to pick when it will be the lowest point in the market,” adding that the market tends to slow in winter. He noted that the median days on the site for June were 73, about five days more than the previous month, indicating a slowdown in buyer activity.
Traglia believes that buyers have a short window of opportunity to secure a property before prices rise again. He noted that the current gap between what vendors expect and what buyers are willing to pay is small but will not last long as market activity increases.
Overall, while some agents are optimistic about a potential market turnaround, others urge caution as the Auckland housing market navigates these uncertain times.
SOURCE: STUFF