The NZ Herald of September 14th 2011 published in article on page 4 headed “House prices and sales on rise”. The article emphasised that the value and volume of homes sold over the month of August both showed increases. As has been the trend over the past 2 years, any increases outside Auckland were of a very modest nature, largely in the 1 – 2% region (measured over the previous year).
Houses for sale in Auckland, however showed much greater increases with the Real Estate Institute (REINZ) figures quoted showing median value increases of just short of 3% in the eight month period since January. Projecting forward, this will lead to an anticipated increase in median values of around 5% for years end 2011.
When reporting on houses for sale in Auckland, REINZ figures lump residences (houses) and appointment/town houses in the same category. The largest group of sales are in the CBD apartment market which has been deflated for some years. Couple this with some areas of the North Shore and Eastern Suburbs where plaster town houses predominate (for this read “leaky homes”), it is a reasonable conclusion to assume that free standing houses in good locations are on track to rise somewhere in the order of 10% in 2011.
From the figures on our own sales board, I can say that this extrapolation to 10% anticipated growth is about right. There is a real shortage of houses for sale in Auckland when measured against the demand. Our office is observing that for a good home in “Greater Ponsonby” we can expect in excess of 100 inspections over a 3 week Auction campaign and 4 or 5 bidders is reasonably normal. Earlier last month (August) we saw two homes attract in excess of 200 inspections over 3 weekends and the number of registered bidders exceeded 15 in both cases.
When I compare the number of houses advertised for sale in Auckland, particularly in the primary medium of the Saturday Herald Homes supplement, it is clear that there is a drop in available homes of approximately 40% over the volumes on offer 2 or 3 years ago, the main difference being that there are now approximately double the number of buyers having sufficient confidence in their personal circumstances to commit to purchase.
Confidence is on a gradual but solid increase.
In the NZ Herald article quoted earlier, ANZ economist Mark Smith said he was surprised by the REINZ figures. “The increase in sales volumes was stronger than we had expected. Sales are continuing to trend up with volumes up 5.4% seasonally adjusted in the three months to August.
With sales volumes around 24% below historical averages as a portion of the housing stock, low mortgage rates on offer, and an improved labour market environment, there is considerable scope for sales to move higher,” he said.
As an industry observer and participant, it is clear that in general terms the future is bright for those looking to transact in houses for sale in Auckland, and that some regions (normally clustered around the CBD) will show very positive growth over what has been a gloomy preceding 3 years.