House price growth may soften as new listings flood the Auckland market under level 3.
Real estate agency heads are up-beat about the supply of properties coming on to market, with some telling OneRoof that the balance may finally tip in favour of buyers this summer.
The comments come as the Real Estate Authority, the governing body that regulates the industry, decides whether or not the current level 3 rules for real estate sector are strict enough for Auckland.
The current rules allow two viewings per day of a property but a spokesperson for the REA told OneRoof that there may be some changes but these may take a day or two to establish.
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Hayden Stanaway, Bayleys director of residential for Auckland and Wellington, believes the easing of restrictions in Auckland will bring new properties to market.
He said that the number of new listings in the pipeline for late September and October look to be above listing volumes for the same period last year.
“We were lucky to get a pretty buoyant August, and now we’ve got a compression period of vendors who have been waiting for five weeks, plus spring stock,” he said.
Though demand has outstripped supply so far this year, Stanaway expected that change once the Auckland market opens up. Vendors who are ready to go to market right now will have the upper hand but that story may change for the second wave, as more houses hit the market.
While properties sold under lockdown, some sight unseen, more vendors are getting their homes ready to sell in level 3 and 2. Photo / Fiona Goodall
“As the supply increases, there will be a lot of opportunity for the buyers. I think there’ll be a balance,” he said.
Ray White chief operating officer Daniel Coulson said the agency expect to busy right through to Christmas."For a lot of buyers, they want to have made the decision to purchase before Christmas, so we’ll have auctions right through to December 22 or 23," he said.
“It’s hard to say at this point whether that imbalance of demand versus supply will change. But we do know from our mortgage partners that the pre-approvals are 54% to 65% higher than this time last year, that’s pretty astonishing demand likely.”
Coulson says that during level 4, the group’s listings across the country were about half their typical 2000 properties, and while stocks will pick up, demand may well match it. “Through lockdown, our bidder stats were huge – 8.7 registered bidders per property and 6.8 actively bidding,” he said.
Barry Thom, co-owner of UP Real Estate in Auckland, said his agents were booked out for level three viewings, and were already reporting buyer frustration.
“There feels like a certain buyer energy. The jury is out as to what happens post-level 3, but home owners are wanting to list their properties. We expect a significant roll-out, but who would say whether that’s going to be 50% more or double.”
Ray White chief operating officer Daniel Coulson: "Through lockdown, our bidder stats were huge." Photo / Supplied
He added: “Level 3 last time around went really well. So we’re expecting we’ll do a lot better than just make up for lost time.”
Harcourts managing director Bryan Thomson said that even given the need to catch up marketing tasks like staging and photography to get new listings underway, his agency had witnessed a rapid uptick in new properties.
“Given we’ve lost five or six weeks, that Christmas deadline is crushing up to us very quickly. Families have genuine reasons to buy and sell, so that’s going to put massive pressure on that ‘by Xmas’ deadline.”
He was unfazed by the limit on personal viewings, pointing to frantic Harcourts offices in Melbourne which has no in-person viewings at all. “The numbers will be interesting, we’ll be busy, but the capacity is there in the industry and we’ve got technology as an amplifier of human performance so that’ll allow better efficiency.”
Barfoot & Thompson operations manager Vaughan Borcovsky said the agency was gearing up for a mega auction season "but we won’t know until December whether that lost five weeks’ volume means double the volume from now on”.
“Supplier capacity may be a little challenging but we are confident they are resourced with enough photographers to meet the expected increase in demand," he said.
"In the past, we’ve done auction sessions with 40 auctions called and we have one or two sessions a day. If there is additional requirement needed, with our six dedicated auctioneers, we have the capacity to add more auction sessions as needed."
Real Estate Institute of New Zealand chief executive Jen Baird points out that August numbers show that the lockdown has not dampened demand or confidence across the country, and indeed higher prices suggest an excess of demand over supply.
She expects preparations during lockdown will bring the usual spring increase in sales, although some vendors may wait until Auckland drops to level 2.
Rules under Alert Level 3:
1. Auctions: No physical auctions. All auctions need to be conducted online or via phone bidding.
2. Open homes and inspections: Open homes are prohibited and private viewings are strictly by appointment only and with the consent of the client and property occupants/tenants. There is a maximum of two viewings per property per day and a maximum of two people from an “extended bubble” can attend the viewing.
Physical distancing of two metres to be observed at all times and only one real estate agent can attend the viewing. The viewing must be contactless meaning that the agent should open any doors/cupboards. Attendees must be pre-registered
3. Pre-settlement inspections: These can take place following the guidelines for private viewings.
4. Moving house: Settlements and moving house can occur. REINZ is currently awaiting guidance on whether inter-regional moves can occur.
5. Appraisals and listings: Appraisals must be carried out remotely where possible. If an appraisal cannot be carried out remotely, licencees may briefly visit homes to conduct appraisals with the permission of the client/s (and tenant/s if the property is tenanted). Only one licencee to attend the property. Discussions regarding the agency agreement, marketing and listing process must occur via telephone/ virtual methods only, not in person. Photography and videography to be carried out remotely by the client where possible.
6. Mailbox drops: Agents should not use letterbox drops to market a property for sale.
