As we have head into spring we have seen noticeable Improvements in the Auckland market, across September and the early weeks of October, data has shown that residential and commercial property has seen a slight, but noticeable, improvement – an indication of what could be to come.
Sales begun quite steady, with most weeks seeing a sales success of above 50% in the cities biggest real estate agents auction rooms. Not surprising is that the highest amount of sales success still comes from central Auckland with Parnell, Glendowie, Remuera, Epsom, Mt Eden, and Grey Lynn seeing high numbers of sales success, whereas southern suburbs were on the lower side of sales. The North Shore sat squarely in the middle seeing a success rate of 50%.
But in recent weeks, data from Interest.com indicated that that had reached up to 60% and that there were only minimal differences between the Auckland and national figures, with sales achieved on 61% of the Auckland properties auctioned – with 57% selling for more than their RVs.
These figures suggest that the expected market warm up that comes with summer is in full effect. It could also come down to a slow but steady dribble effect form low interest rates finally having an effect on the market, with more people having renewed confidence in the market. But with sales being more prominent in the more wealthier suburbs, this could suggest people that are taking advantage of this are those who are seasoned buyers, more so than first time buyers. But as we get closer to the season sales hikes that come with summer it will be interesting with any of the incentives put in place form the government will have any effect on getting more first time buyers into the market.
Investment property has also seen a large spike in sales success, but mainly within Commercial properties – which alone have had a large uptick in sales and interest over the past two years. These increasing sales coming from both experienced investors and those looking to enter the commercial property market for the first time.
The attraction to commercial property over residential has increased with changes to rental and property laws and the general flatting out in the residential market. But what has been most attractive to investors is that outgoings such as rates and insurance are generally paid by the tenant, whereas with residential properties these are usually the responsibility of the landlord.
With government incentives coming into place early next year, and expect cuts to the OCR predicted in the very near future, it’ll be worth keeping an eye on the market to see if these factors have any impact on boosting the summer market numbers.