As the market kicks back into gear in the new year, many are expecting, and hoping, that the ever-reliable summer up-swing will give a healthy boost to the market, but it seems that the last two months of 2019 performed better than anyone expected, breaking some yearly records in the process. So with this trend happening before the New Year and summer fully starts, could this be a sign of good things to come?
This upwards swing was first most evident in November when data from the Real Estate Institute of New Zealand revealed that sales figures in Auckland’s for that month were up 8.7% compared to a year ago, but more impressively, up 19% compared to November 2017.
In December, which is a traditionally quieter month as the market settles down for the holiday period, it performed much better than expected. According to QV’s property index, house values rose 0.9 percent in December, and 4 percent during the year, thanks to a strong pick up since September, particularly in Auckland.
In addition to this, Barfoot & Thompson, hit a four-year sales high in December, selling 779 properties – the most since 2015 when it sold 796 properties. Managing director Peter Thompson spoke about how December was a surprising month for the agency with the four-year record high, but meant there were fewer properties at the end of the month, “The strong December performance has left the market extremely short of stock and at month-end, we had only 3191 properties on our books, the lowest number in any month for more than four years. Properties for sale were 13.8 percent lower than in the previous month and limited stock is holding back sales activity.”
These trends have obviously come off a lot of things, experts mainly pointing to the lowering of the OCR and the consequential low mortgage rates, and the loosening of LVR’s. This matched with high employment has resulted in much more activity from first-time buyers, and has even seen the slow return of investors into the market.
As a result of this trend, both ANZ and Westpac have predicted that house price inflation could hit around 8% this year, which is a stark contrast to how things were looking at the middle of 2019. But experts are quick to point out that we can’t expect a full swing back to how things were at the peak of Auckland market just yet, as its mainly lower-priced houses that are selling due to the first-time buyers mainly having the market share, a group that tends to look for cheaper housing. Auckland’s more expensive houses and suburbs are stills struggling to sell, but if confidence in the market continues to grow at a strong rate, this could soon change.