Short commentary on Eastern Suburbs' real estate market statistics for March 2019
Can’t believe that we are now in April and that Daylight Savings has ended. Seems like it was just yesterday where I was still having barbeques with friends at 8pm and enjoying the warmth of the Summer and now it’s starting to get dark at 6pm!
The question I get asked time and again at every gathering is this: is the market really doing as badly as the media says it is? The truth is we are definitely not at the peak of the property cycle. But neither are we at the bottom. Good properties are still selling for decent prices, but less properties are being sold overall.
If you are impatient (!), you can skip to the relevant sections:
Auckland's property market statistics for March 2019
Compared to February 2019
Compared to March 2018
- Median price up 4.5%
- Sales Count up 0.6%
- Days to Sell decreased by 15 days
- Median price down 2.7%
- Sales Count down 18.2%
- Days to Sell increased by 5 days
Let’s have a look at headline numbers as a matter of fact.
Sales volume is down as the number of residential properties sold in March 2019 is the lowest for the month of March since 2008. Lower sales volume is probably a reflection of the uncertainty in legislative changes that is sitting in the background as no one knows for sure the extent of the Capital Gains Tax that is being proposed. As we head into the winter months, volume of sales is likely to go down further.
Auckland auction sales rate is at a mere 36%, but that’s also a reflection that more properties are choosing not to sell via auction (as to why – have a read of my article that discusses the choice between auctions and set date of sale).
However, prices are still holding well demonstrating no real drastic decline.
Admittedly, this is a market requiring vendors to be realistic about the prices that they are going to achieve bearing in mind the market sentiment if they would rather not sit on the market and have their listing go stale. Vendors need to remember that this market has upside for them to as they are likely to be buyers for their next home and they would be able to capitalise on lower prices for their next move as majority are trading up.
Eastern Suburbs' market statistics and general observations
Covering the real estate market of Orakei, Mission Bay, Kohimarama, St Heliers, Glendowie, Remuera, Meadowbank, Glen Innes, St Johns, Stonefields and Wai O Taiki Bay
Note 1: Suburbs with less than 5 sales (for e.g. Wai O Taiki Bay) 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.
Trends in Orakei, Mission Bay, Kohimarama, St Heliers, Glendowie, Remuera, Meadowbank, Glen Innes, St Johns, Stonefields and Wai O Taiki Bay real estate markets
It’s undeniable. The high-end part of the Auckland property market is certainly taking longer to move. This is clearly reflected by the lengthening days to sell year-on-year (albeit a significant improvement from last month). But if you look carefully, there is no meaningful decline in median sale prices.
3 main reasons to explain this:
- Most owners of the expensive properties are in no particular hurry to move as most have not bought (see reason 2 below) and very few are choosing to buy before they sell in the current market. This becomes a ‘vicious’ cycle where no one is selling because no one is buying (and vice versa).
- Buyers of such high-end properties are largely upgraders and unless there is an urgent need to move (which rarely there is), buyers are very content to wait around for the right house with the right price. First home buyers are unlikely to splash out on a 5-6 million dollar house on Hanene Street in St Heliers with splendid sea views. And first home buyers find it much easier to get lending today.
- Holding power. Sellers don’t have to sell. With job numbers remaining good amidst a collapse in business confidence, there’s no trigger for them to sell. Many are happy to wait out what they view as cyclical trends – after all, they think (rightly or wrongly) that property prices have only one direction based on historical trends. UP. Some sellers have also thought about just renting their properties out if they are unable to sell, so have been in no particular hurry to sell.
So Is Now A Good Time To...
Sell In The Eastern Suburbs?
Well, your motivations certainly matter.
It is certainly a good time to sell if you are realistic about prices, especially when you have accumulated the capital gains over the years. Everyone is thinking the million-dollar question: should I sell now or wait a little longer. But ask yourself: what are you waiting for? There is no guarantee that the market will pick up in the next couple of years. And how long can you wait for? If you are selling and buying in the same market, it is probably advantageous to you as a buyer that the market is plateauing.
And be wary about real estate salespersons bearing high valuations that are simply unrealistic. Ask whether that’s really achievable – it’s tempting to believe it – before you spend all that $ on marketing and fail to sell. Choose your real estate salesperson with care.
The truth is that it is getting harder to find the perfect buyer. The perfect buyer is one who pays over the odds for his/her dream home. In this market when there is no ‘fear of missing out’, very few of such buyers exist. This is why when it comes to selling, you need to cast your net far and wide to find that right buyer. This is where marketing a property well comes in. We can no longer rely on the traditional methods of marketing (what I call ‘list and pray’) done by thousands of your competing vendors (i.e. neighbours who are selling too) to get your buyers through the door.
We need innovative ways to place your property where the buyers are spending the most of their time – and that is on Google, on Facebook and every other online platform that people are on nowadays. Sure, experience matters (and we have lots of it). But without buyers, you can get Nelson Mandela in (Harvard ranked him as the best negotiator in the 20th century) and you will still not sell your home.
How You Present Your Eastern Bays / Remuera Home Matters
Also very importantly in this market is how you present your home. I do not just mean cosmetic presentation or touch ups (although that’s very important). In the current climate where banks are extremely cautious and picky about who they lend to (and will provide record low interest rates to the desirable borrowers), they will turn down any property with issues. For e.g. lack of CCC for bathrooms, slightly defective titles in cross-leases, certain building materials, unconsented works. As a potential vendor, you want to find a way to resolve these issues before you go on the market.
Don’t make it more difficult for your buyers because they will just go somewhere else. Many of such issues can be very technical or legal in nature, and having a legal background (like me!) can help you tremendously. (and no, misleading advertising can land you and your agent into trouble so you will want to check your agent’s reputation in case buyers are scared off)
Real life case study on how we marketed and sold a property in 2019
We just sold 7 Harding Avenue, Mt Wellington under the hammer for a price above the 2017 CV after our marketing campaign. Some key marketing statistics below (yes we track them closely so that we can fine-tune the campaign or change tactics):
- 43,879 Impressions on Facebook
- 21.357 Reach on Facebook
- 4510 views on Trademe
- 200 watchers on Trademe
- Approximately 11,000 Impressions on Google Network
- 70+ groups through a 4 week marketing campaign
We utilised no print media but still managed to achieve a result that our lovely vendors are very happy with and so they can move on to their next life goal and at a fraction of usual marketing costs.
Having an absolute cracker of a online marketing campaign that cuts across various channels is, without a shred of any doubt, the future. Even traditional print media like Property Press is moving online. If you really want to sell, you need to make sure you market it right the first time.
Buy In The Eastern Suburbs?
The million dollar question: should you buy now or wait for the market to “fall even further”?
Given the fierce competition in rates between major banks, mortgage rates have fallen below 4% for the 3 year tenor. This means borrowing costs are lower for many and buyers who are able to obtain a mortgage have more purchasing power. This is definitely a good time to be buying as borrowing costs are cheap! In fact, the Reserve Bank of New Zealand is expecting that the Official Cash Rate will be cut even further which means mortgages rates might fall even more.
It is almost impossible to time the bottom end of the market. Do you know that a recent study found that people are generally overconfident of their ability when they have a little experience? You would almost always think that the market is going to drop even further. But when the price drops, you will think it will drop further or something is wrong. And then put off buying. And the day it hits rock bottom and slowly bounces back, you would think that you’re not going to buy because you want to wait for prices to fall again. And before you know it, prices have doubled and you have still not bought your home.
Therefore, if the house suits you and your family’s needs and you need to buy, then just do it!
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.