The good news for vendors is that the median house price in Auckland increased 20.6% to $1,200,000, up from $995,000 in January 2021, with REINZ’s seasonally adjusted figures indicating prices held up slightly better than expected between December and January.
In her monthly report, Jen Baird (CEO, REINZ) noted that inventory levels in Auckland were quite a lot higher than this time last year (+23.4%) – however, new listings were down 12.8%. “Some people are waiting to see what will happen with international borders opening. Vendor price expectations remain high, but agents are recommending their vendors be aware that market expectations and the narrative around the property market are changing. The market is expected to track steadily, but as international borders open, some people may choose to travel rather than purchase property.”
Baird notes that access to finance, exacerbated by changes introduced in December to the Credit Contracts and Consumer Finance Act (CCCFA), is currently having a significant impact on sales. This sentiment echoed in a survey conducted at the
end of January by economist Tony Alexander in collaboration with REINZ, which noted that the predominant concern for buyers is no longer the availability of stock but instead financing.
“While hard evidence is lacking in terms of the impact of the CCCFA, data from Centrix, a New Zealand credit reporting agency, found the percentage of home loan applications that were approved dropped from 39% in October to 30% after December. The longer-term impact will be seen in the numbers of buyers in the market in coming months.”
Locally, our agents have confirmed this, noting a decrease in the number of first-home buyers and investors in the market in January, primarily due to tighter lending guidelines.
Auctions continue to be by far the most popular and most successful method of sale at Damerell Group, accounting for 82% of our total sales in the past month – that’s compared to 27.8% Auckland-wide. Interestingly, sales by negotiation have dropped significantly over the same period.
"Auctions have become an increasingly popular method of sale in New Zealand, and over 2021 we saw increased numbers of vendors opting to put their properties under the hammer,” says Baird. “In January, we would expect to see relatively moderate auction room activity during and immediately following the holiday period, with numbers increasing in February and into March.”
As we emerge from Omicron and the new lending landscape begins to take shape, it’s going to be an interesting few months ahead. However, despite these uncertainties, it remains a truism that good properties in good suburbs will continue to attract top dollar.
