Short commentary on Eastern Suburbs' real estate market statistics for June 2020 + COVID-19 Impact
It’s business as usual for us.
Open home numbers remain positive and we are seeing increasing confidence in buyers, many of whom have taken a long view on property (as they should be) and positively excited about the low interest rates. REINZ’s statistics have proven that property can be a pretty resilient asset class, even as we are in the middle of a once-in-a-generation pandemic.
Another huge contributor to the prices holding firm is that of limited supply. The number of properties available for sale has fallen almost 50% year-on-year. This limitation in supply is slowly contributing to a ‘fear of missing out’ for some buyers, especially those with specific needs. There is a tangible fear that in a few months down the road, they would be unable to find something that they really like.
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 June 2020
Compared to May 2020
Compared to June 2019
- Median price up 2.6%
- Sales count down 75.3%
- Days to sell decreased by 6 days
- Median price up 9.2%
- Sales count down 9.4%
- Days to sell increased by 9 days
Auckland market as a whole
As REINZ statistics have shown, the Auckland market has steadily increased year-on-year. For those who have bought last year, congratulations.
Days to sell decreased by 6 days from last month, likely the result of buyers gaining confidence in the market again as they realise that the housing market is still going strong.
However, compared to same time last year, Days to sell has increased by 9 days. What is happening is that there are many more conditional buyers requiring finance conditions – and that is taking a longer time to process with the banks well under the pump at the moment. Banks are taking a much closer look at each borrower’s finances (not surprisingly) and that has contributed to a lengthier transaction period.
As mentioned earlier, there are increased numbers of qualified buyers attending open homes and auctions with several parties attending per property.
Investor activity has increased in the market with some seeing an opportunity to increase their property portfolio, especially with low interest rates. There has been a few more sales in the $2,000,000+ price range as vendors make decisions around down-sizing and freeing up money to support their businesses.
Developers are also quite active in this market as they see a good opportunity with low interest rates.
Volume of property sold more than doubled from May 2020, again demonstrating that stock is actually moving fast and not staying on the market. In fact, volume is up year on year meaning that properties are selling faster than they can be listed which is why buyers complain there is a lack of stock in the market.
We fully expect market activity to continue to be steady.
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 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
Our properties in the Eastern Bays and Remuera have continued to receive a healthy level of inquiries. In June, we sold 6 properties and many were under the hammer with multiple unconditional bidders present. These buyers are still looking for a house and are cashed up and ready to go.
In June, we have also closed an off market deal on Riddell Road. This sold to an astute buyer who could identify value and suited our owner who wanted a fuss free sale.
Listings continue to be low, perhaps due to the winter season where most people choose to wait till Spring to list their property. However, this means there is less competition on the market for those who are thinking about selling.
This year, the Government Valuation for 2020 will be delayed as a result of COVID-19. For those for were thinking of bumping up their CV, unfortunately that is not going to happen in time for a sale in 2020.
So Is Now A Good Time To...
So Is Now A Good Time To Sell In The Eastern Bays and Remuera?
The Supply Problem!
The low supply of quality properties continue to keep buyers on their toes as they are forced to compete over limited stock. This naturally keeps prices stable – which explains why the median prices have increased instead of fallen.
Some naysayers argue that the wage subsidies are continuing to keep people in employment and we will only see the true impact on employment once that wears off. Combined with a mortgage holiday (home loan repayment deferral) that will come off after 6 months, we could see an avalanche of properties hit the market.
Well, that sounds possible…except that many homeowners sit on a tremendous amount of equity over the years and many of whom have no mortgages. For those who do have mortgages, the loan-to-value ratio (LVRs) is typically low and with record low interest rates and the various COVID-19 subsidies (including unemployment benefits), many homeowners would likely be able to get by without being forced into mortgagee sales.
Add to the fact that the Reserve Bank of New Zealand has temporarily removed LVRs for retail banks – and you can now clearly see the extent of the support provided to the housing market.
For those who are pre-occupied with unemployment statistics, just note the proportion of those unemployed who actually own houses or are in the market to be buying. These constitute a relatively small proportion of the unemployed, many of whom are seasonal or temporary workers.
But after adjusting for the slight dropoff in buyer demand, the corresponding drop off in the number of properties available for sale is even steeper. This means there are way less properties on the market during this time compared to last year.
As a vendor and if you are thinking about selling, this should be fantastic news. Why?
- Your property is always in competition with others. With less competing properties, there are way more buyers looking at your property than in any other period. More buyers looking = more demand for your property.
- The shortage of supply also leads to motivated buyers having to compromise for a property that may be less than perfect, if they need to move. As mentioned, there are always motivated buyers (and we know quite a few of these) who must buy soon.
- Economists focus on the aggregate demand in the market (aka the ‘big picture’). As a vendor, you can’t control this, regardless of the market conditions. What you can control is your choice of agents, the marketing strategies they employ that are fit for today’s market and how you present your home.
So Is Now A Good Time To Buy In The Eastern Bays and Remuera?
Yes! If it suits your personal circumstances. If you see a house you like, go for your life. You are going to be staying in that house for the next 10 years anyway so as long as you can service the mortgage, who cares if property values fall 10% – if it even happens.
Also, there are buyers who are priced out of the market. Buyers who have businesses who are impacted by COVID-19 can no longer look for houses to buy. This is unfortunate but it means less competition for you the buyer so if you are in a secured job, you should be actively hunting!
We see some cashed-up buyers who are waiting on the sidelines, ready to pounce when there is an unbelievable deal. However, most properties are selling for fair value or if not far exceeding expectations. If you keep thinking you want a good deal, you might end up having to wait a long while and having to continue renting.
Low interest rates are in your favour to purchase. What you are buying now may be at the same price 2 -3 years ago with lower interest rates so you are actually getting a great deal.
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.