New Zealanders are confident house prices in Auckland will shoot up in 2020, the results of a new survey suggest.
And for the first time in more than two years, Kiwis believe prices will grow in every region across the country.
The poll by Colliers International found there was now a net 49 percent (optimists minus pessimists) of people expecting price growth in Auckland over the next 12 months - up from a net 6 per cent three months ago.
A net positive 41 per cent of respondents to the quarterly Residential Property Market Outlook Survey expect the median residential property price to increase.
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Queenstown remains in first place with a net positive score of 63 per cent, while Tauranga/Mount Maunganui remains in second place at a net positive 55 per cent.
Median price expectations in Rotorua, New Plymouth, Palmerston North, Christchurch and Dunedin also almost doubled since the last survey.
Chris Dibble, research and communications Director at Colliers International, says Auckland was the biggest winner in the survey results.
“After a relatively sombre year, respondents are now feeling much more upbeat for Auckland’s future," he says.
Those polled were asked what could have the biggest positive and negative impacts on the property market in 2020.
After a sombre year, confidence has returned to the Auckland property market.
The most common positive response was low interest rates, followed by a change of government. The most oft-cited negative response was election uncertainty, followed by global uncertainties.
Dibble says: "Auckland appears to be showing signs of life again after flat-lining for around three years. While annual price rises in Auckland are likely to remain modest to start with in 2020, it does set the scene for higher rates of growth in 2021.”
He says price rises will go hand in hand with a rise in stock to purchase. “There’s a large pipeline of stock under construction, with around 5,000 units expected to hit the market in 2020 and 2021, with more in the marketing and consent phase.”
The Colliers survey results come as Westpac bank stuck by its mid-year prediction that house price inflation will pick up early next year.
Westpac chief economist Dominick Stephens said this week: "In May we predicted that house price inflation would reach 7 percent over 2020. At the time house prices were falling in Auckland and were cooling elsewhere. The feedback we received indicated that few believed our forecast.
"The latest data from REINZ shows that the housing market has indeed turned. Annual house price inflation has already reached 5.6 percent, and it now looks as though it will reach 7 percent by April 2020 at the latest – there is a chance that it could touch 7 percent even earlier than that."
Annual house price inflation reached 5.6 percent and may well reach the bank’s forecast 7 percent early next year. And that’s not just limited to Auckland.
21 Ardmore Road, Herne Bay, sold at auction for $3.35m. Photo / Ted Baghurst
The positivity in the Auckland market has been reflected in the last auctions of the year, with agents reporting sale well above CV and fierce bidding.
Edward Pack, of Bayleys Ponsonby, sold two Herne Bay homes at auction recently: a renovated double bay villa with a CV of $2.75m at 21 Ardmore Road went for $3.35m; and 101 Marine Parade, which went for $2.525m, almost half a million dollars above the CV.
Pack says of the Ardmore Road home: “It was on the right side of the street, it was a 518sq m site so it was slightly bigger than your average on that street and it was a charming double bay villa,” says Pack.
He says the people who bought Marine Parade property "were a mum and dad downsizing from a large family home”.
John Lantz, from Ray White Remuera, also reported new energy in the market. He sold 69 Meadowbank Road, Remuera, under the hammer this month for $1.580m, above the CV of $1.340m.
There was strong bidding action for 9 Gladwin Road, Epsom, which recently sold for $3.82m. Photo / Getty Images
The small four bedroom house was in an under-rated location, Lantz says, and there was a lot of competition for the property: “We had extracted every little bit in the room.”
Diana West, of Barfoot & Thompson’s Epsom branch, says her team’s auction success rate all year has been 100 per cent. Her three most recent sales under the hammer showed the upper end of the market had bounced back: 9 Gladwin Road sold for $3.82m; 120 The Drive sold for $3.32m; 3 Ngaroma Road sold for $2.3m.
For 9 Gladwin Road, “there were four bidders there and we had 51 bids and it ended up selling for a premium, well above the reserve".
“A number of people obviously exceeded their budget but in the end it always comes down to usually two and the final two really had a hammer and tongs battle; it went on and on and on.”
