Piha drops out of the million-dollar club

Waitahanui in Taupo has been the place to be if you are a homeowner; Piha and Herne Bay, in Auckland, not so much.

Waitahanui, which borders Lake Taupo and is on the outskirts of Taupo, has seen the biggest dollar gains in the last 12 months, with the median value of properties up $132,150 to $770,550.

OneRoof editor Owen Vaughan says: "The surge in property prices can be attributed to the strong holiday home market and increased economic investment in Taupo.

"Waitahanui's growth shows there is buyer demand for luxury waterfront homes at an entry level price."

Taupo Bayleys agent Grant Bayley, who's been in the industry for 15 years, says a Waitahanui had a constant mix of properties with luxury homes and $100,000 houses. "Good waterfront properties get snapped up pretty quickly," he says.

Broadly the areas with the biggest dollar leaps, according to the figures from property analysts CoreLogic, were Upper Hutt and Lower Hutt, which together boasted 11 of the top 20 suburbs that had gains of between $65,450 and $98,250.

The figures, which are part of the CoreLogic's mapping the market tool, show the biggest drops were in Auckland's most expensive suburbs.

Herne Bay's median value fell $210,800 to $2,491,650, while the median value of property in St Marys was down $201,050 to $2,136,750.

Also feeling the pinch were Auckland North suburbs Castor Bay (down $137,850); Takapuna (down $131,650) and Campbells Bay (down $114,300).

Worst of all, Piha, in Auckland's west, fell out of the million-dollar club, with its median value now $965,750, following a $70,450 drop.

Vaughan says the figures are "a good illustration of the challenges the top end of market has faced in the last 12 months, as the foreign buyer ban started to bite and homeowners held off selling".

"The dollar value drops reflect the discounts buyers were able to secure, which is good for them but for homeowners, reports of homes selling well below CV added to further nervousness and kept them away from the market."

CoreLogic senior property economist Kelvin Davidson said the figures and the mapping tool also showed the big differences at play in some neighbouring suburbs. "Saint Johns in Auckland saw median values fall by 5 percent in the year to August 2019, but neighbouring Mount Wellington was stable.

"Similarly, Clover Park saw a rise of 2 percent, but neighbouring Flat Bush fell by 4 percent. In and around Central Auckland and the North Shore, the percentage falls over the past year haven’t been astronomical, but even small drops in expensive suburbs have meant falls of more than $50,000, sometimes $100,000."

He added: "One common reason for diverging performance over the past year will often be because some had risen further in the boom so therefore had further to fall in the downturn."

One effect of the downturn has been the drop in the amount of stock on the market compared to a year ago. According to figures from OneRoof and its data partner Valocity, more than 35 percent of sales in the Auckland region 12 months ago were over $1 million. Today that has dropped to 32 percent or 831 fewer sales.

But, Vaughan says that’s not for want of buyers. “Agents say buyers are desperate for properties in the upper price brackets, if only there were more vendors willing to list.”

Real estate agents in some of the city’s top suburbs say that attractive bank rates and a traditional spring lift have resulted in increased numbers at open homes and strong bidding action at auctions.

Bayleys sales agent Chris Batchelor says homes in Ponsonby are “very hot” right now.

“In the greater Ponsonby area, we are getting huge numbers of buyers coming to the open homes,” he says. “They are all qualified and well-educated with the market.”

That means that they are making decisions quickly, putting in pre-auction offers and battling hard in the last few auctions, he says.

A two-bedroom villa in Ponsonby marketed by Batchelor had a pre-auction offer of $1.5m and was sold under the hammer for $1.58m to a different bidder.

“Prices are going beyond vendor expectations. The general feel amongst buyers and agents is very positive,” he says.

He believes the spring sunshine and low mortgage rates are responsible for the changing mood in the market.

Ray White Remuera agent Steen Nielsen, who sells home around $5 million mark, says more than 100 people showed up at a recent open home for a property he was marketing.

“In the first three months of the year it was a matter of good week or bad week but now in the last several months it’s been very busy.”

Nielsen says his properties are selling for well over the reserved price and cites the high clearance rate for auctions in the Ray White Remuera office - it's sitting at 83 percent - as evidence the market is picking up again.

OneRoof-Valocity figures show the change in sales volume was most pronounced in inner city of Auckland, where sales over $1 million dropped from 57 percent of sales to 44 percent in the last 12 months. Just 2265 properties in the central suburbs sold above $1 million in the past 12 months, down from 3336 the year before, a drop of over 1070 sales.

The most vigorous part of Auckland’s market is now in sales in the $500,000 to $1 million bracket. While city-wide volumes dropped 15 percent, from 24,656 to 21,096, sales in the affordable bracket dropped by only 8 percent. That so-called first home buyers’ and investors’ bracket now account for 61 percent of sales in the last 12 months, up from 56 percent.

Fewer than 500 properties sold across Auckland for more than $2.5 million, nearly half of the 831 that sold the year before.

Bayleys Remuera agent Vicki Wallace, who with her husband Gary has racked up over $1 billion in sales through their career, says that while there’s definitely been a spring pick up through September, vendors are in a “self-fulfilling issue”.

“The mover market can’t identify their next move, as they’re not seeing a lot in the high $2 million, $3 or $4 million market,” she says. “So they’re not listing their low $2 million property to make the next move.”

Another Remuera agent, Gerard Charteris, of Ray White, says the same, as vendors thinking there is not enough stock in the $2 million to $3 million “middle” market, so are holding on to their own properties and not rushing in.

However, with vendors who are on the market are now getting better money for their properties, as prices head up from low $2 million to mid- to high-$2 million, he says buyers are seeing more choice as new listings are coming to market.

Charteris reports a significant lift in requests for appraisals and major growth in the supply pipeline, so is optimistic that big spring growth is happening this year, earlier than previous years.

He has also seen big numbers of buyers looking at lower priced properties (in Remuera, that’s round the $800,000) so the number of sales haven’t dropped off.