It has been widely reported during the past month that the Auckland market has cooled. In Greater Ponsonby the number of homes sold in November were certainly down, but the prices are substantially up. What this indicates to us is that the speculative traders – those ‘quick flick’ buyers, using only 5-15% equity – have dropped right off, leaving genuine buyers and sellers to take control of the market.
Another piece of good news for the market in general is that the changes the Reserve Bank made earlier this year around debt to equity, and the forecasted implementation of income servicing ratios, will create stability for potentially tougher economic times to come. That said, compared to the rest of the world, New Zealand’s economy remains strong, and shows few signs of weakness in the near future.
The number of properties sold in November is slightly down on last month (-4%). In real terms that amounts to a variance of just 2-3 properties – so not much change, here. The big number is the year-on-year figure (-24%), and this can be attributed to buyers taking a wait and see approach through to the Christmas break.
After dipping sharply last month, the median sale price has bounced back up strongly (+19%), and now sits at its highest level for the year, 18% higher than November 2015. This indicates that there is still high demand and good competition at the auctions for quality housing stock in the Greater Ponsonby area.
There’s very little change in the number of days properties are taking to sell – this shows stability in the area. The figures, however, continue to point to the fact that auctions remain the quickest and the best way to sell a home. At 22 days, you’re likely to sell your home twice as fast by auction than you would by negotiation.
Again, the story here is steady as she goes. With only a 1% variance on last month, the clear indication is that demand is still strong for quality homes in the area, and that auctions remain the preferred method of selling and buying property in this marketplace.
According to this month’s figures, auctions and sales by negotiation are now level pegging as the preferred method of sale. Looking at the figure year on year, this appears to be a seasonal anomaly. We expect normal service to resume come the New Year, with auctions once again leading the way as the most popular method of sale.
The fact that Greater Ponsonby is not just holding its ground, but continues to surge with its median sale price, indicates that people who are looking to buy in the area see the suburb as an excellent long term investment, and that they are prepared to pay a premium price to live here.
We are moving into a period where rental property is traditionally in high demand. On top of the added demand caused by immigration, it’s coming up to the start of a new university year, where we will have students returning from their summer break, plus an influx of new students looking for accommodation.