The latest figures from the Real Estate Institute of New Zealand suggest Auckland’s housing market is on the road to recovery.
Auckland’s median sale price for June was up 0.8% month-on-month to $1 million, and while that may not seem like much, prices in the country’s biggest housing market have been relatively stable since February this year.
That suggests the downturn – which saw Auckland prices tumble more than 20% since market peak in November 2021 – is at an end.
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A look at prices in the city’s former local authority areas shows a stronger revival in Auckland City (up 5.9% month-on-month to $1.08m) and the North Shore (up 5.5% to $1.203m).
Sales in Auckland are also up – 1.9% month-on-month and 9.3% year-on-year.
The uptick is no surprise to the city's real estate agents.
Martin Cooper, managing director of Harcourts Cooper & Co, which covers the North Shore and Rodney, says would-be buyers and sellers are now willing to act.
“First-home buyers are very active, and they’re the fuel for the market under $1.1m or $1.2m. In June they transitioned from fear of paying too much to FOMO [fear of missing out], so we’re seeing a return to enthusiasm to buy a property.”
Cooper says the fall in new listings in Auckland, and uptick in prices and competition was a clear sign to vendors to list now. “If they wait until spring, then buyers will be spoilt for choice.”
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Mark Bycroft, co-owner Ray White Epsom, says his office has seen an increase in big sales. “In June we sold a big spread of properties, from $1m to over $7m,” he says, adding that auctions were driving much of the activity – a trend borne out in REINZ’s figures, with 16% of Auckland’s June sales done under the hammer.
Ray White Epsom agent Ross Hawkins, whose highlights last month include a 1970s house on Remuera Road which sold under the hammer for $7.1m, says that high-end properties with visible marketing were proving themselves in this market.
“You can’t sell a secret. It’s not just about working your database as you need to bring in new [buyers] who are spending now. Auctions are the way to go, as the higher end is less affected. These people buy if they want something – they’ve got the money and they don’t mind spending it. The lower end is tougher.”
A five-bedroom house on Remuera Road, in Remuera, Auckland, sold under the hammer for $7.1m in June – $1.7m above its CV in a well-fought auction. Photo / Supplied
However, Hawkins and Bycroft are bracing for lower sales in July as their higher-end buyers head away for most of the month.
“Half of Auckland is at Coronet Peak, the other half is in Europe,” says Hawkins, from Queenstown.
Fellow Ray White Epsom agent Richard Thode told OneRoof his team closed 12 deals in June to the value of $18m. “It confirms there are more buyers in the market place,” he says.
The deals included new-build homes in Mount Roskill, Remuera and One Tree Hill, as well as properties in Mount Eden, St Johns, Epsom and Stonefields. “The new-builds show that that market is coming back.”
However, agents were not quite ready to call whether the traditional spring uptick will emerge in August, and also have mixed expectations about whether the traditional pre-election pause will happen.
“The people who wait [until after the election] may miss the boat, there’ll be FOMO and people will miss out again,” says Hawkins. He also expects that the reality of homeowners’ fixed term mortgages switching over in the next few months from 2% to 6.5% or a higher interest rate may push more vendors to sell their more expensive homes to trade down to smaller homes and more manageable mortgages.
Harcourts Cooper and Co managing director Martin Cooper: "First-home buyers are very active, and they’re the fuel for the market under $1.1m or $1.2m." Photo / Ted Baghurst
On the North Shore, Cooper says his agents were reporting that for the first time in a few weeks, numbers at all open homes have increased and there were translating into sales.
“We are experiencing multiple bidders on homes and multiple offers. Enquiry from vendors looking to go on the market indicates confidence in the process and pricing achievable,” he says, adding that properties that don’t sell at auction now have multiple offers and that developers are back in the picture, not just first-home buyers.
Cooper says that buyers reckon interest rates have peaked and house prices have reached the bottom, and with low numbers of houses for sale, sellers are getting results.
“So it's time to secure a home,” he points out, adding: “Marry a home and date the interest rate! You can always refinance. I firmly believe that the overall sentiment surrounding the real estate market is shifting towards a more positive outlook.”
He says one agent, David Ding, sold 10 properties in three weeks in June, while another, Terry Connell, inked three deals in just one week in July. “The OCR announcement last week, signalling that we were at the top of the interest rate cycle, reinforced the tides are truly turning.
“No doubt in future years people will be saying ‘I wish I had purchased in 2023’,” Cooper adds.
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