September 2018 Residential Report for the Eastern Suburbs, Auckland

Short commentary on Eastern Suburbs' market statistics for September 2018

Hello Spring! In this October 2018 issue of Ruoxi’s Reflections, discover what is happening at the ground level in the Eastern Suburbs and the Auckland property market. What do all these numbers mean for you as either a SELLER or a BUYER? What interesting news caught my eye in the past month?

Auckland's market statistics for September 2018

Compared to August 2018

Compared to September 2017

  • Median price is the same
  • Sales Count down 11.7%
  • Days to Sell decreased by 3 days
  • Median price is the same
  • Sales Count down 2.1%
  • Days to Sell increased by 2 days

According to the Real Estate Institute of New Zealand’s (REINZ) statistics for September 2018,  median prices for Auckland remained the same year-on-year and month-on-month, suggesting that prices in Auckland has flatlined. 

The REINZ Housing Price Index (which factors in changes within the property mix (e.g. price bands and house size)), saw an increase of 0.4% year-on-year for Auckland, a higher percentage of growth as compared to last month’s increase, again demonstrating the vitality and longevity of Auckland’s property market in the face of supposed ‘doom’ and ‘gloom’. 

The shortage of housing in Auckland is clearly one of the biggest issues in New Zealand’s residential property market at present (and will probably remain one of the biggest issues for some time given the systemic nature of the underlying reasons (e.g. expensive sections, lack of infrastructure development, red-tape and labour constraints). The rise of infill townhouse/apartment construction (for e.g. in areas such as Stonefields) is undeniable – Statistics NZ’s numbers below clearly illustrate the relative shift towards smaller dwellings in recent years, with apartments/townhouses etc. now outnumbering houses. 

Ruoxi Wang, Eastern Suburbs' Specialist, ray white, orakei, mission bay, kohimarama, st heliers, st johns, glendowie, top real estate agent

Median number of days to sell decreased as compared to last month, culminating in the lowest median days to sell since April this year. This is a reflection of more buyers coming out of hibernation into action in the Spring weather. 

Auckland’s annual inventory increased by 17.7% year-on-year (from 7,429 to 8,740 – 1,311 more properties), typical of the seasonal increase in supply moving from winter to spring. 

The latest figures indicate an improving market with higher levels of activity as we head towards the glorious summer. However, the increased stock levels will give buyers plenty of choice and keep a lid on prices even though interest rates are at an all-time low. As such, vendors who are realistic with their prices are likely to see their houses sell much quicker.

Eastern Suburbs' market statistics and general observations

Ruoxi Wang, Eastern Suburbs' Specialist, ray white, orakei, mission bay, kohimarama, st heliers, st johns, glendowie, top real estate agent, nzpremiumhomes, new zealand premium homes

Note 1: Please contact me should you need a detailed list of specific sales made in each suburb for that month.

Note 2: Suburbs with less than 5 sales (for e.g. Mission Bay and Wai O Taiki Bay) will not have the median price displayed for statistical and privacy reasons. Also, note that the median price for each suburb may see large fluctuations given the relatively low number of sales on a monthly basis.

Ruoxi Wang, Eastern Suburbs' Specialist, ray white, orakei, mission bay, kohimarama, st heliers, st johns, glendowie, top real estate agent

Understanding the ‘neighbourhood’ market trends (i.e. at a micro-market level) is more useful to anyone trying to buy and sell in these suburbs than the national/regional statistics. 

Bucking the trend are the Eastern Suburbs! Median prices on the whole for Orakei, Mission Bay, Kohimarama, St Heliers, Glendowie, Remuera, Meadowbank, St Johns, Stonefields and Wai-O-Taiki Bay have increased 3.4% as compared to last month and almost 30% as compared to same time last year. I note, however, that the 30% increase in median price is very likely due to a larger proportion of lower-priced stock sold last year during this time. Regardless, the resilience and desirability of the Eastern Suburbs’ property market (as I have continually pointed out), as compared to the rest of Auckland, are not in doubt. 

Median days to sell has followed the trend across the wider Auckland region in that properties are getting sold faster as compared to August last month but still taking a while longer as compared to same time last year.  This is probably because sellers are now in tune with the market and do understand that sometimes it takes a while to find the right buyer. And as I point out below, the right buyers will come if the marketing is done right. 

Open home numbers in the Eastern Suburbs are slightly down in the past few weeks as compared to earlier months but that is likely due to families going away during the school holidays.

What does this mean if you are looking to SELL?

Ruoxi Wang, Eastern Suburbs' Specialist, ray white, orakei, mission bay, kohimarama, st heliers, st johns, glendowie, top real estate agent, nzpremiumhomes, new zealand premium homes

Sell or buy first in this market?

That’s great! You may be wondering whether to buy or sell first. I have examined the pros and cons of these options in the current Auckland market here but, at a huge risk of generalisation, it is probably financially safer to sell first before buying for most people now. Renovated houses in desirable Eastern Suburbs remain especially in great demand by families. Also, as pointed out above, the general increase in smaller dwellings in smaller plot sizes has made standalone houses much more desirable.  

Auctions v Set Date of Sale – which is the better method of sale today?

A point to bear in mind in the selling process is to examine which method of sale you should go with. While the general market seems to think that auctions are failing, that is not true for all properties (Ray White Remuera’s auction rooms are still pretty well-attended!). Obviously, some properties are more suited to auctions than others (read here for a specific comparison between Auctions and Set Date of Sale) so you need to discuss with your salesperson before you list your home which method of ‘no-price marketing’ is going to suit your house best. Ask him/her why that particular method would work for your property and if he/she suggests an auction, ask him/her about auction clearance rates.

Relaxation of Loan-to-Value Ratios?

Finally, there has been market chatter about the Reserve Bank examining and loosening Loan-to-Value ratios (LVRs) in November 2018. The RBNZ did loosen the LVR limits a little at the start of 2018, and may have contributed to the renewed buyers’ interest in more recent months. If the LVRs are indeed loosened, we can possibly expect even more active buyers in the market. For example, more owner-occupier buyers who have 150K can now enter the market for a 1 million dollar home, compared to a much stricter restriction on such ‘low-LVR’ buyers. This should translate into better outcomes for vendors in terms of buyers’ competition and price support.

Ruoxi Wang, Eastern Suburbs' Specialist, ray white, orakei, mission bay, kohimarama, st heliers, st johns, glendowie, top real estate agent

Spring Marketing Specials

Ray White Remuera is offering lots of Marketing Specials this coming November from print to digital media so that you get maximum exposure for (relatively) minimum advertising cost. We are talking about free upgrading of advertising space on Property Press/NZ Herald, and much more! 

Did you know that 82% of buyers found their dream home online based on a 2017 Nielsen survey? That’s why it is important to have salespersons who truly understand the mechanics of online marketing. And no, we are not talking about boosting Facebook posts and putting houses on TradeMe (anyone can do those). Our team (Rita, Lindi and me) has a bespoke marketing strategy combined with search-engine techniques that are specifically targeted at these buyers. Without giving the game away, we can expose your home to the widest possible pool of genuine buyers and achieve the best price for you

We Can Market Your House Better

Learn more about our unique selling strategy designed to get your house in front of the buyers that matter.

Yes, I want to sell my house FASTER for a GREAT price

What does this mean if you are looking to BUY?

Ruoxi Wang, Eastern Suburbs' Specialist, ray white, orakei, mission bay, kohimarama, st heliers, st johns, glendowie, top real estate agent, nzpremiumhomes, new zealand premium homes

Stop Waiting!

If you are waiting for the market to crash before you buy your family home, I would suggest you stop waiting and start looking. Spring is already here and vendors are starting to list their properties for sale. That would mean more choices. 

Prices are unlikely to fall drastically with the fundamentals still supporting the housing market – a relatively stable economy (government just announced a $5.5 billion budget surplus), stable immigration numbers, and an inelastic and continuing under-supply of houses especially due to factors such as the shortage in labour and high construction costs. Even credit card spending is up!

Desperate vendors?

You may think that vendors of properties that are passed in at auctions are desperate to sell at any price. That is simply untrue. It is because the vendors can afford to hold on to the property (especially in this low-interest rate environment without any major economic event (yet!)) so they have not sold at the price that some bargain-hunters try to offer at auctions. The vendors are willing to wait a little longer till they find the right buyer – and their patience often does pay off. 

The smart buyers are those who make an offer at fair market value. That is a great deal as they: 

  1. Get to buy the house over those trying to grab a bargain
  2. Get to enjoy the house with their family for many years to come
  3. Finally have a change to take a break from attending open homes! 

Foreign Buyer ‘Ban’

As the deadline for the implementation of the foreign buyer ban looms, some buyers think that they will get a chance to pick up houses at a bargain as select vendors might have to sell for less given declining demand. However, the fact is that most of the buyers looking to buy are either residents (who have satisfied minimum length of residency requirements) or permanent residents or citizens in New Zealand. These are exempted classes (I have previously written about the ‘foreign buyer ban’ in relatively extensive detail here, along with a handy flowchart). 

According to Statistics New Zealand, the percentage of properties that were transacted to a foreigner in the June 2018 quarter was just 6.5% of all the transactions in Auckland. As such, for the vast majority of houses in the Eastern Suburbs and in Remuera, the foreign buyer ban is unlikely to have a radical impact on prices.

Non-property related (and interesting) news

Congratulations on having read this far. It’s not all about property. All work and no fun (property is fun though!) makes Ruoxi a dull girl. 

Banksy Auction Stunt: Going, going, gone...

The latest news in the Art world is Banksy’s auction stunt. The Canvas of Girl with Balloon artwork self-destructed after it was sold at auction for just over £1m. Banksy had secretly built a shredder into the painting so that it would self-destruct if it was ever put up for auction.

GUESS what’s the most bizarre part? MyArtBroker said that while Banksy’s art typically appreciates 20% every year, the canvas is worth possibly twice the value it was bought at because it is now “part of art history in its shredded state”. That’s a nice turn of events for the buyer who has opted to keep the painting (duh)!

In the meantime, catch you around the Eastern Suburbs (do not be shy to say hello)!

Found this post useful and have more questions?

I have detailed statistics at my fingertips, including recent sales within the Eastern Suburbs (or any suburbs), so do not hesitate to contact me for a no-obligation discussion over coffee on your future plans to either buy or sell. 

Contact Ruoxi for a 10-min chat today!

Ruoxi Wang, Eastern Suburbs' Specialist, ray white, orakei, mission bay, kohimarama, st heliers, st johns, glendowie, top real estate agent, new zealand premium homes, nz premium homes
Disclaimer: Yes, I am a licensee salesperson under the REAA 2008, but I am not your salesperson and this article does not create any relationship between you and me (other than reader and author of course). All the information on this website is published in good faith, for general information purpose only and should not be seen as specific financial or investment advice. I do not make any warranties about the completeness, reliability and accuracy of this information. Any action you take upon the information you find on this website is strictly at your own risk. Copyright: The material contained in this website, including property information and images, may not be used in any way without the express permission of NZ Premium Homes or Ruoxi Wang.
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