As attendance at open homes picks up, agents are reporting glimmers of a spring turnaround in the Auckland housing market.
First-home buyers are starting to re-engage with the market, with some going head-to head with investors.
At one auction in South Auckland last week, three first-home buyers fought over a large family home in Randwick Park, only to be beaten by a first-time investor, but in Auckland’s North Shore and Rodney districts, first-home buyers were in pole position.
Harcourts Silverdale manager Tim Glatt said that eight out of nine properties on the agency’s slate last week sold under the hammer, with two or three buyers bidding for each.
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Glatt said he was seeing an up-tick in activity at the lower end of the market, particularly among first-home buyers.
“There’s a real undercurrent of activity and buzz – open homes are busier and there’s more buyer interest,” he said, pointing to two sales to first-home buyers in last week’s auctions: a four-bedroom brick and tile home in Eban Avenue, Hillcrest, on the North Shore, which was snapped up for $1.25 million, and a smartly renovated three-bedroom 1920s home on Palmerston Road, in Birkenhead Point, which fetched $1.58m.
“The auctioneers were able to get some fun and energy in the auction room. You could see people spilling out the door,” he said, adding that convincing vendors to use an auction campaign was “a real easy sell”.
“Auctions are 100% a barometer of the market. We’re seeing first-home buyers, investors and upsizers – it’s a range of demographics and price points.”
A three-bedroom home on a 1025sqm section, on Hyde Road, Rothesay Bay, had three active bidders and sold to a developer for $2.865m. Photo / Supplied
Glatt said first-home buyers know there was plenty of stock in the market and that they had options.
The standout sale last week, however, was for a rare development site, not a first home. A three-bedroom 1960s house on a 1025sqm section, on Hyde Road, in Rothesay Bay, had three active bidders who pushed the final price of the property to $500,000 over its reserve to $2.865m.
“It was a prized property, on the market for the first time in 54 years, so one of those once-in-a-generation changes of ownership,” Glatt said.
“That sort of thing is highly sought after by developers, but we’re seeing multiple segments back in the market.”
Harcourts Greenhithe agent Ronelle Henning said that over the course of two days she had more than 76 groups view a four-bedroom house plaster home at 11 Te Wharau Drive, in Greenhithe. The property, which is being sold by way of deadline sale on September 8 and has a CV of $1.325m, hits the “affordable sweet spot” for the city-edge suburb, although she would not say what she expects it to sell for.
In South Auckland, agents reported that first-home buyers and investors were returning to the auction rooms.
Ray White agent Pat Lapalapa had seven bidders – three of them first-home buyers – batting back and forth at the auction for a five-bedroom brick family home on Hyperion Drive, in Randwick Park. The house, on a 623sqm site zoned for suburban density eventually sold to a first-time investor for $771,000 – $59,000 under CV.
“Prices have come down. You can get a three or four or five-bedroom house on a freehold section, now for what you would have paid for a new-build terrace last year. There’s not as much competition with developers,” he said.
Fellow Ray White agent Levani Lum-On said that first-home buyers had been sitting on the auction sidelines because of lending restrictions, so were still missing out on the price drops. “Vendors would rather take the guaranteed money [at auction] rather than conditional afterwards, even if it’s more money,” he said.
Ray White Manukau business co-owner Tom Rawson said that 60% of vendors would still opt to sell by auction, with around half of those selling under the hammer, but left a fair share of properties available for the conditional offers that first-home buyers bring.
“Investors looking at yields aren’t competing in that three bedroom/one bathroom market as the yields are better for them with larger, extended family properties. And developers aren’t interested in 600sqm properties. They’re now looking for 800 to 1000sqm. So, the competition is just other first-home buyers, they’ve got the opportunity now,” he said.
“They’ve all got similar budgets, so then it’s just the emotional connection in that $750,000 to $850,000 bracket.
“We really like to see first-home buyers getting into homes – it’s that feel-good factor."
