Short commentary on Eastern Suburbs' real estate market statistics for September 2019
Spring is (finally) here after a couple of false starts. Cherry blossoms are starting to bloom along the streets as we drive around in Remuera and the Eastern Bays speaking to and meeting with clients.
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 September 2019
Compared to August 2019
Compared to September 2018
- Median price up 3.7%
- Sales count up 0.7%
- Days to sell decreased by 5 days
- Median price up 0.2%
- Sales count up 6.3%
- Days to sell remained the same
From a general Auckland real estate perspective, the cold chill over the winter season has definitely been removed, with September activity picking back up. Open home numbers are up, and we have been seeing more auctions being brought forward as a result of pre-auction offers. This suggests that buyers are feeling just a tad fearful of missing out, and making strong offers before the auctions in an attempt to beat the competition.
Prices are still stable with a very slight upward pressure. Despite the jump in sales in September, vendors appear to be remaining cautious as new listings are still at the lowest. Hence, while demand is running constant, the lack of stock on the market reduces the choices for buyers, thereby pushing up competition slightly and resulting in better than expected results in the sale price, or time on the market.
Eastern Bays' and Remuera's market statistics and general observations
Covering the real estate market of Orakei, Mission Bay, Kohimarama, St Heliers, Glendowie, Remuera, Meadowbank and St Johns
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 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
From the sellers’ perspective, their expectations have been adjusted and more vendors are becoming more realistic in accepting that the yesteryears’ prices may no longer exist, and they have to start moving on. As they say…better a bird in the hand than two in the bush.
Older stock (for example houses that have suffered from terrible marketing or have issues) is also starting to move as buyers start to act in the face of dwindling stock levels and loosen up their previous ‘non-negotiables’.
Buyers are realizing that the likelihood of prices falling further are slim without external negative economic pressure. The fact is that many vendors do not need to sell, so have very little room to be cutting prices unless these vendors are motivated by other factors (for e.g. buying another place at a great price or having to move overseas/downsize).
Usually we would expect a lift in stock with the warmer season. For ourselves, we are seeing a lift in listings and will be bringing 3 to the market this spring (and may have a couple more to come). However, the fact that general stock numbers are not up suggests that the market could be headed for a reasonably quiet start to the summer selling season.
So Is Now A Good Time To...
Sell In The Eastern Bays and Remuera?
A lack of choice in the current market in Orakei, St Heliers, Mission Bay, Glendowie, Kohimarama and Remuera
One big concern, given the lack of listings especially in the prized Eastern Bays and Remuera areas, is that vendors are worried that they are unable to find a property that they will like if they sell theirs. Very understandable – after all, who wants to move without a home to look forward to? Well, a solution to that problem is for a long settlement and for vendors to start house-hunting early. This means getting finances sorted etc before even putting your own home on the market and getting mortgage pre-approvals. Why? You can start making offers at the time when your house is on the market, based on timely feedback (hope you are getting them from your preferred agent), and with slightly longer median days to sell, that means you can reasonably be looking at 2-3 months to buy your next home.
Have a read about our previous article on buying or selling first here.
Brief us about your buying requirements.
Another tip is to get in touch with real estate agents with a wide network and tell them about your buying requirements. We speak to many homeowners every day, some of whom are happy to sell ‘privately’ (if there’s a right offer) because they don’t want to deal with open homes. Their homes may well be suitable for you. But we wouldn’t know how to help you if we don’t have your buying requirements.
Work with agents who have wide networks
Well, it’s a network that’s driven by digital marketing and outreach, and not just by listings and open homes. And this is something we possess, that we can utilise to your benefit.
Downsizing in this market
If you are downsizing, then you should consider all options carefully. Time and tide wait for no one, and there’s no guarantee that the market will ‘recover’ next year. Sure, it may eventually recover in the next decade but can you wait till then?
What we would suggest is to make sure you are comfortable making the next step and happy as to where you are going next. This would involve researching and making sure that the environment and home you are buying next will fit your requirement.
Buy In The Eastern Bays and Remuera?
As with previous months, our views remain unchanged – it remains a good time to be buying if you are buying your first home or upgrading, and you can comfortably afford mortgage payments. Why?
- In the September meeting, the Reserve Bank decided to keep the official cash rate (OCR) unchanged at 1.0%. However, with signs that general (CPI) price pressures are still pretty subdued and that the New Zealand economy might be stalling, there is widespread expectation that the OCR will be cut to 0.75%. This will drive retail mortgage interest rates even lower, especially when the volumes remain subdued and banks compete for the best business. Some experts have predicted 2s by the end of the year.
- As mentioned last month, the banks began to loosen their internal 7-8% serviceability tests, which will have given a little more impetus to borrowers. For first home buyers, if you can get a couple of flatmates in, you might find that buying is cheaper than renting. The problem is obviously trying to save for that deposit amount…Check out this chart where you can see the servicing levels for borrowers falling.
- And there’s chatter about reducing the LVR requirements in November, especially for investors. If this happens, you can expect to see the smaller investors (who have collectively borrowed just half of what they did in 2015) start returning back to the market, especially with the dismal interest rates in term deposits and bonds.
- The lower ‘trade-up’ premium makes now a great time to be upgrading. A 10% discount on a $2 million property translates to a $200,000 discount. If you are selling your $1.5 million house at the same 10% discount, you would have profited from a $50,000 discount ($200,000 – $150,000) when upgrading. And because buyers at the higher price levels are less, there’s much more bargaining power.
- The Reserve Bank has also reported that whilst first home buyers are still recording the fastest growth in lending flows amongst owner-occupiers, all others within that owner-occupier group are also just starting to show a tentative pick-up in the pace of growth
The first home buyers’ market remains very active, and we would classify a first-home buyer to be anyone who has a budget of $1 million and (not impossible for a dual income household that’s slightly older).
Of course buyers hope that they will buy at a big discount (and often sell at a top price). This is likely to be impossible if you are buying and selling ‘normal’ properties (i.e. properties without issues) in the same market, AND pick an average real estate agent with average marketing strategies to sell theirs. The market is pretty efficient, especially in this digital age where information around sales is open to many. That being said, bargains can still be had if you look carefully and are willing to put in a bit of work.
If you are looking for an advantage over your competition, here are a few tips as to what you can do:
- Get your mortgage pre-approval in place. We can’t stress this enough. This allows you to put it unconditional pre-auction offers and beat out other first home buyers.
- If you need Kiwisaver for your deposit, then get your Kiwisaver withdrawal letter before you put in offer in to reduce the amount of time you need to go unconditional. Vendors will view your offer more favourably, especially in multi-offer situations.
- Be on good terms with the listing agent. Try to understand your competition to see if they are investors, first home buyers or cashed up downsizers.
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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.