Despite the weakening numbers, buyers are still very much present in the market for all the reasons they always will be. But, if there is no form of 'call to action', they will be cautious and they will hold back. This is a market that needs a strong, experienced team that is focused on collective strategies.
Properties, well marketed, with a fixed point of sale, such as auction and tender, have not only a far greater probability of success, but will also sell with markedly fewer days on the market. Why? Simply because the longer people have to make a decision, the less likely they are to act. Motivated buyers need to know that they are dealing with a motivated seller, and a strong indicator of a motivated seller is seeing time and money invested in a comprehensive marketing programme. Also, an auction date focuses the mind to carry out all due diligence promptly.
We have entered a phase of the market where vendors will greatly benefit from experienced real estate professionals who have the skills and collective ability to build a strategy specific to each property and vendor, to ensure buyers are placed in open, transparent competition to determine the best price achievable under current market conditions.
It is reasonably unusual to see such a large drop in sales numbers in April, compared to March. March is traditionally a big listing month with high sales volumes, but usually those volumes remain high, as stock, marketed in March sells in April. This month’s 34% fall, coupled with the 40% drop year on year, is clear confirmation that sales volumes are falling, as has been widely reported in the media.
Regardless of market conditions, there will continue to be a shortage of homes for sale in Auckland, meaning demand will remain high. Yet we cannot realistically expect median prices to increase year on year at 26%, as these month’s figures indicate. Forecasting ahead, a month-on-month increase of 1% is a far more realistic figure, and this steady increment will still achieve a median increase of 10% plus over the next 12 months.
Statistically, not only does selling your home by auction have a higher probability of success, but it also notably shortens the time a property is on the market. It is also reasonable to conclude from this that if a property sits on the market for a shorter period, plus is then given a definite date of sale, ie. auction day, then the possibility of achieving a better price is also more likely.
You will notice an increase of ‘withdrawn’ properties in this month’s stats. Why? The one thing a vendor can be certain of after a quality auction campaign of three weeks is the true market value of the home. If, for whatever reason, this figure does not enable them to achieve their objective, they can withdraw their property from the market – and this, we surmise, accounts for the elevated figure of 14% in April’s statistics.
The statistics this month continue to bear out that, for the vast majority of properties, an auction gives a much higher probability of sale than any other method – not because most will sell under the hammer, but because it is the only sale method that, if not sold on the night, will generate a natural ‘next step’ advantage over price by negotiation or set date of sale.
This map gives you an overview of total sales and median price across the Greater Ponsonby area. Hover over the yellow dots for the statistics on each suburb. To view other suburbs we monitor (such as Titirangi), zoom out or drag the map.
The Rental Market
Following on from ‘Mad March’, April remains quite steady in the rental market. However, stock levels are at their lowest so far this year, so it’s a good time to be putting your rental property on the market. Interestingly, some landlords have swapped to shorter term renting, using the likes of AirBnB, but that can be a risky strategy as regular revenue is hard to forecast due to fluctuations in daily occupancy. Yes, it’s more money per night, but if a property is empty for more than 2-3 nights a week, a landlord can quickly start to lose money. Great for times of high demand, like the upcoming Lions rugby tour, but that’s only a spike.