Auckland housing market is on the rise again after two consecutive years of cooling off, according to CoreLogic QV December House Price Index report released on Wednesday, January 8.
According to the CoreLogic QV December 2019 House Price Index, property values rose by 0.9 per cent over the month, with the annual rate of growth increasing to 4.0 per cent. That's up from the 2.0 per cent lull in June 2019 and the strongest annual growth figure since September 2017 (5.0 per cent).
This increase in house price is naturally set to bring sellers back into the market who have either been shying away or were being reluctant sellers only for quite some time in a market that was largely a buyer's market. The new data from property listings website Realestate.co.nz has also shown that Auckland's property market is effectively a seller's market now.
Vanessa Taylor, spokesperson for realestate.co.nz said, "The total number of homes available for sale reached never before seen lows around New Zealand, while the national average asking price sat over $700,000 for the first time since records began 13 years ago. We saw a record low for new listings nationwide."
In a seller's market occurs, demand exceeds supply, or there are more buyers seeking to purchase homes than there are available homes on the market.
"Given the limited choice of homes available, people are often reluctant to sell without having somewhere to go – especially if the rental market in their area is cramped."
"This then has a flow-on effect with homes coming off the market before new ones go up for sale," Vanessa said.
Many experts had earlier opined, and the Indian Weekender had also reported that in 2019 Auckland's housing market was a buyer's market where investors and sellers both remained cautious thereby giving some advantage to the prospective first home buyers to get into the property ladder.
However, it seems that this recent upward swing in the property market might put some prospective first home buyers in a slight disadvantage despite the current levels of relatively low-interest regime and as some targeted properties might slip out of their hands in a rising market.
Notably, in 2019, many prospective first home buyers who were earlier locked out of Auckland's property market due to skyrocketing house prices had finally managed to get their foot on the property ladder.
However, not everything is gloomy for the prospective first home buyers in this rising market in early 2020 as they do not see property prices going down anytime soon and continue to remain on the hunt for getting on the property ladder.
CoreLogic Head of Research, Nick Goodall, said, "First home buyers remain active, and there has been a re-emergence of property investors, as their confidence in the market returns."
Mortgage Adviser Vins Grover of Finance Matters told the Indian Weekender “We expect the market to support both of the buying categories (investors and first home buyers) as good numbers of newly built houses are coming in the pocket size of the first home buyers while the investors will jump in because they will have a greater amount of equity with them. So we see this as favourable to all.
“With the recent drop in the interest rates, there will surely be more first home buyers jumping into the market and soon this will invite the investors also who were in the “Wait and watch” mode as they would have more equity in hand due to the property prices going upwards. These movements could trigger the market further towards higher price but at the same time, we do expect a bit of slow down during the election this year,” Vins said.