Short commentary on Eastern Suburbs' real estate market statistics for December 2019
Happy 2020! Hope everyone had a good holiday. For some of you lucky guys, you might still be enjoying the summer at your baches.
The real estate market has kicked off early with new properties starting to come on as school holidays are coming to an end. We can already see the sighs of relief for many parents who have to continually think of new ways to keep their children entertained.
Join us to see how 2019 ended for the property market as we look forward to 2020. We are already working on 5 listings at the moment with more to come in February.
After a sustained period of low sales volumes and flat prices for the past 3 years, it’s likely that potential vendors had adopted a wait and see attitude to selling their properties after the cuts in mortgage interest rates that occurred throughout last year. By the end of the year, vendors are now starting to have more confidence to put their homes on the market and this creates a ‘loop’ where buyers (who own homes) have more choices and enter the market too.
If you are impatient (!), you can skip to the relevant sections:
– Eastern Suburbs’ housing market statistics and general market observations (covering Orakei, Mission Bay, Remuera, St Heliers, Glendowie, Kohimarama, Meadowbank, St Johns)
Auckland's property market statistics for December 2019
Compared to November 2019
Compared to December 2018
- Median price up 0.6%
- Sales count down 22.4%
- Days to sell decreased by 1 day
- Median price up 3.5%
- Sales count up 31.7%
- Days to sell decreased by 5 days
Auckland market as a whole
Auckland property market had a good month in December, where the number of properties sold was the highest number of residential properties sold in the month of December since 2015.
House prices are on the rise again in Auckland according to the Real Estate Institute of New Zealand’s (REINZ) latest House Price Index (HPI) – up 4% from last year.
It appears that, with interest rates at record low levels plus the fact that the government canned capital gains tax, confidence has started to trickle back into the market and prices are on the rise again.
Westpac’s economists have long held that low interest rates would see house prices rocketing upwards, and that if this run of strong gains continues, house prices could pick up by about 7% in 2020.
This is underpinned by continued migration into the country, low unemployment rate and a relatively stable economy.
However, this rise may not last long. Fixed mortgage rates may increase at some stage in 2020, plus the capital ratio requirements on banks to keep more cash in reserve in the later half of 2020 could force them to hike interest rates or reduce their lending to all but the best customers. If that happens, expect the property market to cool down – mortgage lending is the lifeblood of the property market.
Eastern Bays' and Remuera's market statistics and general observations
Covering the real estate markets of Orakei, Mission Bay, Kohimarama, St Heliers, Glendowie, Remuera, Meadowbank, St Johns, Epsom and Mt Wellington
Note 1: Suburbs with less than 5 sales will not have the median property price displayed for statistical and privacy reasons. Also, note that the median property price for each suburb may see large fluctuations given the relatively low number of sales on a monthly basis.
Note 2: The REINZ uses unconditional sales data (when the price is agreed) rather than at settlement, which can often be weeks later. It is therefore more accurate and timely.
Note 3: Epsom’s and Mount Wellington’s statistics are provided for general reference for homeowners based in those areas and are not included in the overall “Eastern Bays & Remuera” numbers.
Trends in Orakei, Mission Bay, Kohimarama, St Heliers, Glendowie, Remuera, Meadowbank and St Johns real estate markets
The Eastern Bays and Remuera have unfortunately not seen such a dramatic increase (compared to other parts of Auckland) as prices have been somewhat stable for the last few months.
What is definitive is that we are receiving a lot more enquiries. In fact, quite a number of buyers that are looking to buy in 2020 are returning Kiwis, returning New Zealand Residents or new immigrants who have finally decided to settle down permanently.
And we are witnessing this increased hype. We launched a property in St Heliers last week. In 2 days, we had 10 enquiries, 24 groups through the first weekend of open homes, 2 private viewings and an offer. Could it be that “FOMO” is back?
With America Cup coming in 2021, properties with a view of the action could see more interest and possibly fetch higher prices.
However, owners with properties close to the beach or in high flood zone areas need to be aware that insurance companies are increasingly using “risk-based pricing” on their policies. This means that if you own a waterfront apartment, be prepared to pay more in insurance premiums for it. And buyers may be put off by the potential eye-watering sums of insurance premiums. If you are looking to sell such properties, now may be the best time to act.
So Is Now A Good Time To...
So Is Now A Good Time To Sell In The Eastern Bays and Remuera?
Oh, the beautiful glorious weather is here. And that’s a great time to sell if you can showcase your garden plus how the sun shines into your house.
As previously mentioned, market activity seems to be rather hot now. Buyers who do enquire are anxious to see the property as soon as possible and make offers. That frenzy in 2016 seems to be inching back!
Selling in the first quarter of 2020 also means that you are not too close to Elections which could go either way this year. Elections often dampen the mood and generate a huge amount of uncertainty. This is certainly the case for Australia in the last election and post-election behaviour.
Buyers are likely to take a more cautious mindset or “wait and see” approach in case they buy right before a slump. If you were hesitating, start planning to go as soon as possible and call us for a strategy session – the renovation work you were planning to do may not be required or get you the return you are expecting!
If you are a landlord, keep a watchful eye on the new law that the government is trying to push through on rental property which would prevent landlords from ending a tenancy without giving tenants a reason. This is extremely onerous on landlords and if you are thinking all the extra requirements are driving you crazy and increasing your cost of business, perhaps it is time to cash up and look for better returns elsewhere – such as commercial.
So Is Now A Good Time To Buy In The Eastern Bays and Remuera?
As a buyer, you might be thinking, oh dear, the market is heating up, I should wait for the next low period.
However, have you considered that when the market was falling, you were also waiting for it to be at the bottom of the pit?
Here’s the truth. It is difficult or near impossible to time the perfect time to buy real estate.
However, if you have saved hard for the deposit, and you find a house that you like, and your bank is also willing to lend you, then you should go ahead and buy if your finances permit! Real estate is about how long you hold onto it, and not when you buy into the market. Sure, you might buy a little higher than a couple of months ago, but who knows when the next low period will come along?
In the meantime, are you going to stay in your current house and feel miserable? Or pay rent continously till the market corrects again? By then, you might have paid more than enough rent for the difference anyway. And there are certainly intangibles to owning (as opposed to renting) your own home that cannot be quantified by money.
So we always like to say, act now. Not because we are real estate agents, but because we are also buyers and the best time to buy is when you are ready.
Of course, in terms of the market, we are not at the peak of it yet so yes, definitely, go ahead and start shopping! Call your mortgage brokers today.
Good luck with your new purchase.
Take The Seller Quiz Below!
Found this post useful and have more questions?
We have detailed statistics at my fingertips, including recent sales within the Eastern Bays and Central Auckland suburbs, so do not hesitate to contact us for a no-obligation discussion over coffee on your future plans to either buy or sell.