Auckland’s Real Estate Market: A Look at the Latest Trends
The latest report from the Real Estate Institute of New Zealand (REINZ) for the month of July 2023 shows that Auckland’s median prices decreased by 8.8% year-on-year, down to $990,0001. However, there are some strong indications that this trend may be changing.
Auckland’s Real Estate Market Activity
According to most local real estate salespeople, first home buyers were the most active buyers in North and South Auckland, while owner-occupiers were the most active in the central areas. Developer interest also went up in South Auckland, after almost no activity in this sector for over twelve months. Notably, auction activity has risen slightly in most parts of the region. Real estate agents report that they are having increased attendances at open homes (up 38% from the previous few months), and auction attendances are also up (+18%).
The feeling amongst those of us in the industry is that the market has bottomed out, and the increase in numbers at open homes and at auctions leads to promising signs for an increase in activity.
Inventory and Days to Sell in Auckland’s Real Estate Market
The current median days to sell within the Auckland region is 44 days, which is more than the 10-year average of 37 days. The number of properties on the market has reduced from this time last year, with July 2023 having approximately 21 weeks of inventory, which is 8 weeks less than the same time last year. This shortfall may be attributed to the pending election and a reluctance of some vendors to bring their property to the market around the time of an election.
House Price Index in Auckland’s Real Estate Market
The REINZ House Price Index (HPI) for New Zealand, which measures the changing value of residential property nationwide, stood at 3,551 in July 2023, showing a 0.7% increase compared to the previous month. Jan Baird of the REINZ comments that “This month’s figures show a lift in market activity with sales counts slightly increasing in many parts of the country on July last year, and the year-on-year decrease in median prices continuing to ease, suggesting some confidence is returning”.
Election Uncertainty
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Despite the positive signs, there is still a feeling of uncertainty and anticipation of the election scheduled for 14th October. It remains to be seen how the election will affect the real estate market in Auckland, and New Zealand as a whole.
Have a look at this graph which averages how the market has moved through the 24 months surrounding past elections. Especially interesting is how prices have moved depending on who won the election.
Auckland’s Real Estate Market in Summary
While Auckland’s real estate market has experienced a decrease in median prices year-on-year, there are some promising signs of increased activity. The increase in numbers at open homes and auction attendances, along with the slight rise in the House Price Index, suggests that some confidence is returning to the market.
However, the pending election and uncertainty around it may continue to affect the market in the short term.
If you are thinking of selling but think you would be better to hold off until later in the year, our advice is…don’t. Our advice is to buck the trend and go to market before the election. This way you will take advantage of the most important factor affecting house prices: Supply and Demand.
As noted above, supply is at its lowest in a very long time, while buyer interest is at its highest. Our strong feeling is that there is likely to be a flood of new properties to the market after the election, particularly if National/Act get into power.
Lisa and Steve Stone
Elite Agents for Ray White