It’s a fact that 2017 saw a general trend of decreasing sales volume, with the number of houses sold down 20% in February and October, according to Quotable Value, and a slowing of price growth when compared to the previous four or five years.
Interestingly, however, our office bucked that trend at the close of 2017, with December seeing our highest monthly volume turnover of the year – an increase of 63% in sales volume on December 2017. What can we read into this?
We have seen no activity to indicate that ‘good’ properties are doing anything other than increasing in value, albeit at a slower rate than previous years. And with volumes down, demand continues to exceed supply, with 70% of sales in December below $2m. To those living in other Auckland regions and out in the provinces, this figure may seem very high. But the reality is, that in Greater Ponsonby, $2m buys a ‘good’ villa or bungalow, but certainly nothing in the upper end of the property range.
It’s true that the indications are pointing to a very unpredictable year for real estate across New Zealand. However, given the unique position Greater Ponsonby finds itself in – its proximity to the city, with a fantastic hospitality hub, and great schooling, shopping and transport connections – our confident expectation for 2018 is for a slowdown in volume of sales, but with values continuing to rise, albeit at a slower rate than in previous years.
The increased volume of sales in December reversed a trend seen in previous months and also went against what was seen across the rest of Auckland that month. The net result is that our office commenced the New Year with more stock than in previous years, so we will be watching the sales figures in the first quarter of 2018 with great interest.
The lack of movement in the median sale price from the previous month and small decrease compared with December 2016 says more about the distribution of sales than actual changes in values. At times like these, speculative activity disappears, with homeowners at the upper end of the market tending to put plans on hold rather than sell. This has the effect of bringing down the median sale price, but doesn’t necessarily translate to a drop in prices within each price band.
As the pressure comes off the market it is reasonable to expect that the number of days to sell will increase. This is certainly the case with properties marketed ‘by negotiation’. However, the number of days to sell ‘by auction’ remains reassuringly constant, at around 22 days. With auctions, buyers know they are dealing with a serious seller, not a speculator.
As we continue to see month on month, year on year, ‘auction’ properties generally sell more quickly than those marketed by any other method – plus, they have a much higher probability of achieving a sale. Again, it’s no mystery as to why informed sellers choose this method of sale.
Marketing greatly influences our buying behaviour. It therefore makes complete sense that when selling your greatest asset that you invest in a quality, comprehensive marketing plan, run by experienced professionals, as an integral part of both auction and set date of sale campaigns.
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.
The Rental Market
The rental market is still in the doldrums, with people focused on their annual holidays and other festivities. However as we approach the end of January, things will pick back up to normal conditions. Already we are seeing listings picking up and are having multiple applications for most of our properties. Interestingly, we are seeing an increase in demand for good, one-bedroom rentals close to the city, as professional singles and couples move away from the traditional flat-sharing model of rental accommodation.