You may have been hearing in the news recently that the some parts of the Auckland market are cooling down, with some taking a major drop in price and below their CV. In this blog we will look at why and where this is happening.
New data from the Real Estate Institute shows sales activity around some parts of Auckland have fallen by more than a quarter, year-on-year. Mt Albert had the biggest price fall, from a median $1.170 million last year to $805,250 this year – a drop of 31.2 per cent. Royal Oak had the next biggest drop, from $1.160m in 2018 to $865,000 this year, or 25.4 per cent.
A report from CoreLogic has revealed that the dip in the Auckland market has less to do with weakness in the top or lower end of the market in all areas, but more about the areas themselves. The report revealed that the sluggishness of overall values has been centered in Auckland City and North Shore.
The data showed that more expensive areas of the city, such as Auckland City and North Shore have had a slight decrease due to the high number of listings and low affordability. In contrast, suburbs such as Rodney and Papakura are performing slightly better due to a modest number of listings and high affordability – making them more attractive, especially for first-time buyers who have recently seen a slight return to the market.
The data is a welcomed sign, despite the “dip” as it shows that properties are still being purchased, and the market is still being active – it’s just the cheaper properties that are currently selling better, in the more western and southern borders of the city.
Data from the Real Estate Institute backs Up this claim, showing sales activity around some parts of Auckland have fallen by more than a quarter, year-on-year. Mt Albert had the biggest price fall, from a median $1.170 million last year to $805,250 this year – a drop of 31.2 per cent. Royal Oak had the next biggest drop, from $1.160m in 2018 to $865,000 this year, or 25.4 per cent.
Experts have indicated factors such as the balance of unaffordability, buyer interest, availability of housing and access to credit and with first time buyers heading to more outlining suburbs that are more affordable and investors and those looking to buy in the city “have hit the limits of what they’re able to pay for housing”.
First home buyers have also returned to the market strongly, both first time buyers and Investors each accounted for 24% of property purchases in the recent quarter. These buyers are less likely to buy in the more expensive suburbs, instead looking out further south and west where prices are cheaper.
However, investors could soon return to the market now that the threat of the capital gains tax has been eliminated, which some experts predict could have been holding this group back from buying more property.