Where is the Auckland Housing Market Going in 2017?

Tony Buckwell
August 11, 2017

If you have been involved in the residential real estate scene in Auckland recently, then you are likely not surprised by the market commentary released by several analysts, including Barfoot & Thompson’s Peter Thompson.

June saw very low sales volumes.

“Sales numbers in June at 855 were down 3.5 percent on sales in May and down 26.8 percent on the number in June last year. Sales for the month were at their lowest in June for seven years…This cooling in market activity has had an inevitable impact on prices… The median price for the June month was down 2.9 percent on the average median price for the previous three months and the same as it was for the same month last year. While prices invariably fall as we head into winter, June’s results confirm that prices are definitely falling. Monthly sales numbers have been below the previous year’s numbers for nine consecutive months, and that is finally having an effect on prices.”

Now that the statistics for July’s activity have been released, here are the main ‘take-aways’ from the latest monthly report by Peter Thompson:

“A combination of winter blues, school holidays, and the impending election has resulted in fewer sales and new listings throughout Auckland during July. In July we listed 1173 new properties, which is the lowest number for the same month in the past seven years, and 25 percent lower than in June.”

“There was little change in the average sales price across Auckland during July. At $908,319 it represented a 5 percent increase when compared to the same period last year and down 0.6 percent from the previous month. The median price was down 4 percent when compared to the average median price for the previous three months.”

“So, if we were looking at this analysis in the context of a school mid-year report, the teacher’s summary comments at the end would read – “Overall, the middle of 2017 has seen sales volumes, listing numbers & prices showing a downward trend. Properties are still being transacted. However, the success stories are limited to sellers who are realistic to the current market conditions and set their price expectation accordingly.”

So, knowing what has been happening is all well and good, but what is the expectation for the final five months of the year?

I am constantly talking to people connected to real estate in some capacity, and here is the consensus:

  • We are unlikely to see any significant upward change in the market before the general election on 23rd September. This will also coincide with the arrival of spring, and the traditional seasonal upturn.
  • Until these two market influences arrive, market sentiment is likely to stay as it is and many prospective home sellers are choosing to sit and wait before making their move.
  • There may well be some political influences on market activity as the parties start throwing a few more ‘policy lollies’ around to entice voters. The areas which may be affected by this type of pre-election activity could be the construction sector, first home buyers, banks & other lending institutes.
  • Right now may be the best market conditions for buyers seen in recent years. However, this may be short-lived. Many commentators are predicting the residential sector to be  re-energised once the election is behind us and the wet winter weather finally subsides. After almost one year of a generally ‘flat residential market’, a return to a more positive vibe may not be too far away.

My final observation is this:

As an agent working at the coal face of real estate, I agree that in an overall sense the statistics accurately represent what I have seen happening in the areas I work. However, market-wide statistics do not reflect the experience of each sale/purchase.

Realistic vendors who bring well-presented properties to the market, backed up by a quality marketing campaign, are still capable of achieving excellent results.

A very recent campaign I managed saw two written offers, at close to the asking price, within three weeks (plus more interest backed up behind those offers). The owners had done a tremendous job preparing their home and elected to set their price realistically.

If your preference is to sell now, don’t hold back. Listing numbers are down & there are still many active buyers in the market. Just do the fundamental things right & get a quality agent on board to manage the process professionally on your behalf.

Please feel free to contact me if there is anything you would like to discuss. I am always happy to hear from you.

Catch you next month – Tony.

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