The housing market’s red hot run isn’t over but it has moved into a new phase.
“If the last period we’ve been in was a King Tide, we’re probably operating at High Tide, and obviously Covid-19 last year was a Low Tide in every sense of the phrase,” says Daniel Coulson, Chief Operating Officer for Ray White.
READ MORE: Find out if your suburb is rising or falling
High Tide is still a strong market, and according to the real estate firm’s internal data, there has been a 259% increase in new listings year-on-year.
Start your property search
There is still a high level of buyer engagement with current appraisal numbers up dramatically, and that’s seen a 369% increase in live listings compared to last year (when taking Covid-19 lockdowns into account), and also up 9% on the year before.
The high tide can be seen at recent Ray White auctions. In Christchurch last week, huge 16 properties sold under the hammer for more than $11.4 million combined, with the stand-out being the $1.1million achieved for a four-bedroom new build home at 8 Te Haunui Lane in Pegasus.
The listing agent Justin Hartley said: “We had 21 groups through to inspect during the campaign and buyers from the North Island snapped this one up.”
Chief Operating Officer for Ray White Daniel Coulson: March was our biggest ever month. We completed $2.45 billion of sales.” Photo / Supplied
Another highlight was the $613,000 sale of a smart four-bedroom home at 159 Wales Street, in Halswell. The listing agent Brad Beukes said he had 90 groups through during the open homes. “All eight of the registered buyers bid for this property. Stock that comes to the market is sold quickly with strong competition because demand is outstripping supply.”
While the coming winter market is impossible to predict, real-time data from group is a good place to analyse what is happening now, Coulson says.
Ray White Now is the agency’s vehicle for publishing data and market insights and was set up amid all the Covid-19-related predictions. “We created the document Ray White Now and it’s a real-time analysis of our data that we have every single day,” Coulson says.
“It tells us how many properties have been listed and how many properties have been sold, and it’s our ability to really accurately measure exactly where we’re at. It gives us a really strong ability to see the level of home loan pre-approvals in the market, and it gives us the ability to see average registered and active bidders right across our network.
“Having access to that data has been a lifesaver for us in terms of being able to not only have confidence in the market ourselves, but in being able to articulate to both buyers and sellers exactly what’s going on, rather than that speculative sort of style.”
159 Wales Street, in Halswell, Christchurch, sold for $613,000 – more than $200,000 above its 2019 RV. Photo / Supplied
The data is saying right now that there is less stock coming to market to satisfy demand, so conditions for selling are still strong, Coulson says. That strength in the market is following on from sales activity over the summer he describes as “unprecedented”.
“It’s been record-setting territory each month for our business in terms of volume and value. March was our biggest ever month. In March, we completed $2.45 billion of sales across our New Zealand network.”
Lifts in activity have taken place across the board, Coulson says. “There hasn’t really been a sector of the market that hasn’t seen a significant lift in volume and value over the last period of time we’ve seen post-Covid-19.”
Regional New Zealand, however, has been the stand-out. “Auckland gets all the attention, and the Auckland market is a big market but regionally, throughout New Zealand, the regions have been performing very, very well,” Coulson says.
That is potentially partly because of Aucklanders getting out of Auckland to live and work but also because of affordability factors.
Investors are taking a wait and see approach since the return of LVRs and the Government’s shake up of the housing market, but those changes are potentially damaging to first home buyers – the very people they were designed to help, Coulson says.
“When you look at the restrictions, or the things that have been implemented to effectively help the first home buyer, something we’re acutely aware of is the first home buyer is probably a bit of a misnomer,” he says.
“What first home buyer means to a lot of people is the young couple that buys the house with the picket fence and has the dog but actually over the last few years the first home buyer has become the person that goes ‘I’m going to buy a property – it might not be the property I live in, it might be a property out of Auckland or it might be a property in another region or an apartment I rent out while I continue to rent.’
“By the Government’s definition that person is actually an investor, that person is not a first home buyer, so they’ve almost become the unintended target in some cases of these changes that have been made and potentially it makes it harder for those first home buyers to get on the ladder. It’s almost like you accidentally target the endangered species.”
