The speed of change in the housing market this year can be seen in the dramatic drop in the number of days it takes to sell a house. And properties selling by auction, rather than by fixed price, negotiation or tender, are moving even faster.
Properties around New Zealand are taking only 32 days to sell, according to data from the Real Estate Institute of New Zealand for the three months to the end of September. That’s four days faster than the same three months last year.
READ MORE: Pre-auction offers back with a vengeance
And in certain parts of the country, properties are selling even faster. In Southland, the average sale period for a property going to auction is just 21 days (other methods of sale take 31 days on average). Manawatu Whanganui auction sales have averaged 23 days in the past three month and Wellington 24 days.
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In the Auckland region properties going to auction selling within 29 days, compared to 36 days for other methods.
Within Auckland, there are some suburbs with even faster turnaround. Rosehill, in the city’s south, the number of days to sell is 15 days (last year the average was 40 days), while Green Bay, in Waitakere, it’s 18 days.
57 Wainui Avenue, in Point Chevalier, Auckland, sold after just four days on the market. Photo / Supplied
In Auckland City, Point Chevalier averaged 20 days, but agents in the suburb think the number may be even lower when for the month of October.
Professionals agent Derek von Sturmer says: “Every quarter has been different, but our office average is actually 14 days to sell since lockdown Level 4. We’ve done 63 sales, over $100 million.
Von Sturmer says that contrary to popular belief, buyers in the suburb are not developers or expats, they are just “people moving within the market who just need more room”.
The reason for the demand is simple: “People prefer Point Chev over Ponsonby or Herne Bay. It’s becoming more popular and it’s an amazing community.”
Recent sales in Point Chevalier highlight buyer determination. A four-bedroom modern home at 57 Wainui Avenue recently sold for $3.45 million after four days, with the vendors receiving four offers over $3.1 million. A four-bedroom bungalow at 92 Kiwi Road had 15 registered bidders after just seven days on the market and sold for $2.45 million while 26 Muripara Avenue just sold after 11 days on the market for $2.8 million, $1 million above the rating valuation.
Von Sturmer says some buyers have been looking for 12 to 18 months, so as soon as they see something they like they make an offer immediately. In fact, the company was finding that viewers at Saturday open home were making offers on properties that day, leaving some very upset people who had already missed out by the Sunday open home, so now the team only do Sunday open homes.
REINZ CEO Bindi Norwell there’s an insatiable appetite for property right now. Photo / Supplied
“Buyers are super-stressed because they can’t buy a house, so we’re making it fair for everyone.”
Bindi Norwell, REINZ chief executive, says: "It has surprised us over the last couple of months how quickly properties have been selling.
“Traditionally properties take a little longer to sell in winter than they do in summer, however, the insatiable appetite for property is driving the median number of days to sell a property down at the moment.”
Ray White Invercargill business manager John Murphy is not surprised that Southland has the fastest days to sell. A lot of the speed he puts down to investors, as first home buyers generally take longer to sort of their finances and get due diligence done.
“Invercargill feels like a bubble - it’s going really well. There are still plenty of investors. This week, I put something on the market on Tuesday and had six offers by Wednesday night, three of them good cash offers.
“We’ve got them [investors] from Auckland, Wellington, Christchurch, buying sight unseen. They’re just watching [the listings] and sending offers.”
Murphy says the increase in construction work in the city means there is no shortage of potential tenants, adding that the possible Tiwai Point closure “never made an inch of difference”.
“They can’t buy in Queenstown, or Arrowtown or Wanaka, so they’re coming here.”
Mortgage broker Rupert Gough, chief executive of Mortgage Lab, says that the 10 to 12 days banks need to turn around an application for finance can be a nightmare for buyers. Once buyes are pre-approved to a certain amount, the bank turnaround for a particular property drops to just two days, particularly if the deposit is over 20 percent of the property value.
“The strategy of people putting in pre-auction offers is that they know it blows other people off who can’t speed up their finance [approval]. Investors are typically pre-approved so they get the advantage.”
Norwell expects to see more properties sold by auction this summer “particularly as we have a shortage of listings in the market at the moment and auction is a good way to test market value”
But she cautions that when properties are selling quickly "a large factor at the moment is FOMO or the fear of missing out.
“We just hope that people are taking their time to undertake the appropriate due diligence and to ask the right questions before jumping in to purchasing a property.”
