My Account
The national median house price rose by 1.5% from $551,750 in December 2017 to $560,000 in December last year.
In Auckland, prices rose by 0.2% to $862,000, up from $860,000 in December 2017.
Property owners hoping to make a sale in the first half of this year will need to take a realistic approach to market value, according to Real Estate Institute NZ chief executive Bindi Norwell.
“While December is usually a quiet month as people focus on Christmas holidays, December 2018 was extremely quiet with the lowest number of properties sold for the month of December for seven years,” she says.
The number of houses sold across New Zealand in December decreased by 12.9 per cent year-on-year to 5330, down from 6117 in 2017, or 787 fewer houses.
“What we’re hearing is that part of the lower sales volumes can also be attributed to some vendors’ understanding of the value of their home.” Harcourts Tandem Realty co-director Amy Wagstaff agrees.
“Vendors who may have gone on the market last year to give it a try, at a price that may have been too high, will need to listen to the price feedback from potential purchasers,” Ms Wagstaff says.
“They will need to meet the market if they want to sell.”
Mike Pero principal Andrew Steens believes buyer confidence will be the main issue impacting the market this year.
“This factor overrides all other factors, as buyers tend to purchase based on emotional rather than fact-based issues,” he says. “Headlines talking about prices dropping in Auckland and Sydney have a much greater impact on buyer behaviour than relatively boring analysis of interest rates, Loan to Value Ratios (LVR), immigration figures and building consents.
“Unfortunately, the Sydney market looks like taking a hit this year and Auckland typically follows about six months later.”
Mr Steens predicts a decline in prices in the order of 3-5 per cent over 2019, as property sale numbers continue to decrease, putting downward pressure on sale prices.
“However, at some stage during the year, I would expect that underlying demand will provide a floor to prices, as there is still an overall housing shortage and a relatively strong economy in NZ.
“I expect entry level properties to remain relatively buoyant in the local area, with prices dropping little if any. Sections always take the hardest hit in a slow market, so I would expect these to drop the furthest.
Lifestyle blocks also tend to decline relatively more than residential, as these tend to be a discretionary purchase rather than a ‘must have’.
“The bach market tends to do less well than family homes for the same reason, but also the higher LVR on second homes and the potential for capital gains tax has an impact.”
Mr Steens says balancing all these negative factors is the ever-increasing desirability of living in the Mahurangi area – it is seen as having low crime rates, excellent beaches, good schools, quality shopping and entertainment options, a relatively affluent population, good transport (Hill Street intersection excepted!) and, with the new motorway, it is easily commutable. These factors all underpin property prices here.
Ms Wagstaff says her team has noticed less demand recently for lifestyle, rural and luxury properties and sections.
“This will mean that these three market segments may take longer to sell. This is not an unusual thing, it just means that these vendors need to be patient and not have high expectations for a quick sale; unless they are willing to look very competitive in terms of a sharp price and some extra marketing.
“We have seen a high number of sales and purchase agreements written and listings signed up in the
Snells Beach and Algies Bay area over the holidays. This shows buyer confidence going into the New Year, so 2019 is looking good for our local house prices and sales.”
Commenting on the impact of the LVR changes effective from January 1, Ms Wagstaff says any change to improve the potential for first home and low equity buyers to purchase a home will be good and will bring out potential buyers.
