Summary of The Auckland Market
Our Managing Director, Peter Thompson, made the following comments about the market to the end of August: “We are certainly in a period of high activity and have been selling around 1,000 homes per month for the last three months and at month end we had only 3,777 properties on our books. That’s the lowest number of properties at month’s end in the past 10 years. In August the average price was $592,395, less than $1,000 higher than the average price in July, and in the last three months the average price has increased by less than 2%.”
Tony Alexander of BNZ, provides a great summary of the Real Estate market in his 20th July weekly overview: “Lack of supply kept house prices rising as predicted from 2005-07 in spite of sharp interest rate increases, limited price falls to only 11% on average during the global financial crisis, and has seen prices now rise about their late-2007 record levels.
During the period from 2008 to the end of the last year the majority of young buyers, and one suggests investors, had the view that house prices would probably fall and that it would be a good idea to hold off buying. But now those fears of house price falls have completely gone out the window as four years of delayed buyers have rushed into the market to be followed by the more cash rich investors. This frenzy of catch-up buying explains the articles in the NZ Herald in Auckland regarding aggressive bidding at auctions and people describing the easy tax free money they have made from purchasing a year ago and selling now.
Those stories of wealth gains carry a lot of traction and will be bringing even more buyers into the market. This is where cycles come from. Sentiment changes cause people to catch up on delayed buying, or bring forward planned buying so this causes a surge in prices and activity. We are very much into the early stages of a particularly strong cyclical upturn occasioned by the delayed purchasing noted above, bring-forward buying and the investor element.”
As always, whether you, family or friends are looking to sell, buy or would like an update of your property’s current value I would be honoured to help you – just give me a call or send me an email.
September 27 2012 01:49 pm | Uncategorized
Robert Davies