First glimmer of the Auckland housing market turnaround

The softening of Auckland’s property market may have finally bottomed out, according to latest median values reported from OneRoof Valocity.

“With the exception of the Rodney area, the rate of value softening within Auckland has noticeably stalled over the past three months,” says James Wilson, Valocity’s director of valuation innovation.

“Auckland experienced either unchanged values or slight increases.”

The three month improvement is a glimmer of change, although values in Auckland city are still down 4 percent on a year ago and in North Shore down 4.17 percent. But Rodney, despite its stall over the winter months, still shows an annual pick up in values of 2.2 percent.

“This indicates that the declining value trend which has been evident across the city may be beginning to reverse, a result of strong market activity levels across the city as we approach the summer months.”

Median values are still climbing around the country. Dunedin is still showing the biggest boom – up 2.27 percent in the quarter and a dramatic 16.88 percent in the past year – but Hamilton, up 5.56 percent on a year ago, Wellington, up 5.48 percent and Tauranga, up 4.69 percent, are reaching their peaks.

“Queenstown and Tauranga experience slight declines – down 0.25 percent and 0.74 percent in value across the last three months. We see that as fuelled mostly by investors continuing to adopt a wait and see approach within these areas,” says Wilson.

Outside of the main urban area, there are 11 regions which continue to experience more than 20 percent annual growth. This is topped by Hastings, which has grown a whopping 30.38 percent in a year, and 3 percent in the last quarter, bringing its median value to $515,000 from $395,000 a year ago.

Wilson points out that the other high value growth locations all have median values of below $400,000: from Wairoa, up 28 percent to$160,000 to Hawkes Bay, up 20.83 percent to $362,500.

“The actual dollar amounts of these gains are comparatively small, with an average value gain of $60,000 across the territories.”

Wilson says that first home buyers remain the most active in group in the market, but points to the beginnings of an uptick in investors (people with three or more properties) returning.

“Wellington, Tauranga and Christchurch are all experiencing an increase in the share of investor registrations compared to the same period last year,” he says.

“This trend continues when we look into the share of registrations to multi home owners (people with two or more properties), where we see an increase in registrations for all the main urban areas apart from Auckland.”

But the market volume has still not returned to peak years. Nationally, sales for the year are still below 95,000 (94, 343), which is 10,000 down on 2018 volume of 105,687. In Auckland, volumes are still well below the 2018 figure of 26,076 residential properties sold, sitting at only 19,464 properties the most recent 12 months to date.

“This is a result of the cautious or ‘wait and see’ mentality which has been present in the market over the past few years,” says Wilson. “Spring sales have picked up but with limited stock coming to market and still a cautious mentality being adopted by many market participants, sales volumes are unlikely to spring back to their peaks experienced during the peaks experienced during 2015/16.”

The good news for Auckland is that first home buyers now make up 28 percent of mortgage registrations, up from just under 26 percent a year ago. Investors are just under 15 percent, down from 17 percent 12 months ago.