The Auckland suburbs where houses are selling above CV

Most Auckland houses are still selling above their CVs, new research from OneRoof.co.nz shows.

OneRoof.co.nz and its data partner Valocity identified 71 suburbs in the city where on average residential dwellings sold above their 2017 CV and further 42 suburbs where they sold at CV.

Omaha, Piha, Herne Bay and Northcote Point performed the best, recording average house sale prices of eight to 12 per cent above CV.

OneRoof.co.nz editor Owen Vaughan says: “There is much discussion within the market about value of CVs, but they are still used by most Kiwis in their property decisions.

“The fact that houses in many Auckland suburbs are selling at or above CV, despite recent drops in sale volumes and properties taking longer to sell, shows that we aren’t in a buyer’s market yet.”

OneRoof.co.nz and Valocity looked at the sale price to CV ratio in 162 Auckland suburbs where there were 20 or more sales in the year to March 2019. A ratio of 1 meant that on average properties in the suburb sold at CV. Below 1 meant properties were selling below CV and above meant they were selling for more than CV.

The research also showed that certain property types were more resilient to changes in the market than others, with newer build apartments showing particular strength.

Of the 12 Auckland suburbs where there were 20 or more apartment sales in the year to March 2019, just one, Glen Eden, saw average sales well below CV – the result of a trouble-plagued apartment complex within the suburb.

Another three saw dips of two to three per cent below CV but the rest, where new apartments developments have come on stream, performed at or better than CV.

Positive results

Vaughan says: “The findings are generally positive for homeowners in Auckland but there were signs of a buyer’s market at play in a dozen suburbs, where sale prices for residential dwellings were more than three per cent below CV.

“Houses in Mission Bay saw the biggest drops below CV, at seven per cent, with the average house sale prices in Kingsland, Whenuapai and Hillsborough also coming below their 2017 valuation.

Barfoot & Thompson regional manager Rod Robinson sales activity in Auckland is now focused on properties under $1 million.

“That proportion is likely to remain high as more affluent owners are often willing to wait and see if the prices will rise,” he says. “Buyers across all price brackets will have their chance of a good deal. An important point is both buyers and vendors must meet the market.”

He sees opportunities for buyers to do better in newer or outlying areas where there is a lot of new building activity.

“The pendulum has moved a little bit, but it’s not a lolly scramble of things for free. Vendors can move a little bit if buyers come in without conditions, as ‘clean’ as possible.”

The pocket to be in is around Remuera, where Ray White’s agent Steen Neilsen says there’s always “organic traffic” in and out because of its zoning for Auckland Grammar and Epsom Girls Grammar. He’s still seeing up to 50 buyer groups through open homes (in the recession it was more like ten, he says) and last month had between two and five bidders at five auctions. All sold between $1.8m and $3.6m.

Buyers who spot limitations on a house will make excuses to either move on or negotiate, he says, but those who connect with a property emotionally (not just on square footage or number of bedrooms) will pay more, as they’re not just bargain-hunting.

A hair above CV

OneRoof.co.nz and Valocity research also showed Christchurch single family homes, as well as flats and apartments, were all selling at valuation or a hair above. In Tauranga, average prices are one or two per cent off CV, while in Wellington they are one per cent above. Dunedin sales for flats and houses are a very comfortable three per cent above.

In Wellington, there is just the whisper of the switch in favour of buyers. Gareth Robins, whose 21 Ray White offices span the region says they are only just reaching the end of what has been a solid boom phase in the market and prices are yet to dip.

“We are noticing is that buyers are falling in numbers and are becoming less urgent in making a purchase, leading to slightly less buyer interest in each property and fewer offers, but prices however have been holding firm,” he says. “Although the market in the city seems to have lost a bit of steam, Lower Hutt and Upper Hutt [with] comparatively affordable housing are still seeing strong buyer interest and is also holding record pricing levels.”

He notes that prices and buyer interest are still strong in the Wairarapa. He links the drop in buyer urgency to a build up in stock over the past month.

“Demand is still strong in the sub $600,000 price bracket, moderate from $600,000 - $1,000,000 and you will find fewer buyers again as you go over $1,000,000. This will mean good opportunity to purchase a property at a 'fair price' in the $1,000,000 plus bracket,” he says, expecting that to continue over winter. He’s noticed that developers are leaving some money in their new builds, so buyers can do well there, adding that while Wellington doesn’t get the big gains like other markets, it doesn’t tend to crash, either.

Affordable prices

However, Robins does point out that comparisons of sales price to cv are distorted at the moment by the recent reassessment by the council, which is affecting prices until the market settles back.

Further up the country, Simon Tremain, of Tremains, says that Hawke's Bay, Taupo and Rotorua have certainly not tipped, with plenty of properties under multi-offers and a lot of buyers.

“Anything under the median price ($470,000) has two to eight contract offers,” he says. “The median prices here are still affordable compared to Tauranga or Nelson/Marlborough,” which Tremain sees as benchmark regions for buyers relocating from the big cities for lifestyle and more house for their money.

That said, Tremain notes bargains can be found where houses have been slow to sell - for example city-style two or three level townhouses on small sections - or where vendors have over-capitalised on build or renovation and need to get their money out. Sales are slow up to $1.5 million, barely moving from $1.5m to $2.5 million, so he welcomes Aucklanders to “come on down and spend their money!”

Harvey’s Simon Short and Bayleys Dickie Burman concur that their Tauranga patch is still not a buyers’ market, as the stock levels are not abundant or over-supplied.

Short points buyers to the $600,000 to $750 or $800,000 price level, and what he calls the Papamoa juggernaut, where there is plenty of supply to haggle over as the area out-performs the rest of the Bay of Plenty.

Burman says that big value increases have slowed up as they were no longer sustainable, but says buyers aren’t making silly offers either.

“The best value at the moment is in the investor market, below $400,000, where some investors are getting out because of government policy,” he says. He too points to Papamoa, where there are good home and land packages to meet the growth of population and first home buyers.

But don’t expect beachside bargains at the Mount. “It’s going gang-busters. It’s its own little bubble, like Queenstown. A lot of people want to live there.”

First offer = best offer?

And while Christchurch has come off its post-earthquake boom, when cashed up buyers were spending their insurance money, Harcourts’ Jamin Marshall says that the market is balanced or neutral between buyers and sellers at the moment. He says that where competition is fiercest in the first home buyer market with places still going for over CV, but that the same general rules apply - how a property is presented, how it is marketed.

“I couldn’t tell you everything is selling for good money, or getting bargains. I just sold two properties for below cv last week, but then one for $400,000 above.”

John Bolton, of Squirrel Mortgages, has observed price softness in the market recently, advising vendors that the first offer is usually the best offer. He says special, high demand houses are still getting the money, but average houses surrounded by a lot of other average houses are tougher sell - so better for buyers.

“Property traders are getting the ‘fugly’ property deals when there’s a lack of buyers,” he says. “But they’ve been patient, looked at a lot of property, negotiated and worked hard. You make the money when you buy well, but you have to kiss a lot of frogs to find that prince.

His advice: “Put an offer in. If you don’t put an offer in, you won’t get a deal. Vendors are pulling properties off the market if they’re not selling."