Add in the tightening on lending criteria, and there is even more uncertainty as to what 2022 will bring. That said, there is still strong interest in good properties in sought-after suburbs, and we closed off 2021 as one of our strongest years for sales numbers, auction results, and prices achieved for our vendors. The depth of experience and skill of our sales team had a direct impact on this result and will be in demand as we move through the next 12 months.
Looking at the big picture across Auckland, the latest statistics from REINZ report a slight drop in the median house price over the past month, but a whopping 25.9% increase year on year. Jen Baird, Chief Executive of REINZ, commented that December was a solid close to a strong year for the New Zealand property market, with house prices considerably higher than December 2020 and demand and sales activity remaining firm.
However, Baird tempers this news with a suggestion of storm clouds gathering ahead. “We are noting signs of deceleration in annual price growth compared to previous months. While the market remains confident, the impact of rising interest rates, tighter lending criteria and changes to investor taxation restrictions are starting to shift dynamics.
In particular, Baird notes the amendment to the Credit Contract and Consumer Finance Act (CCCFA) on 1 December 2021 — which requires stricter scrutiny of borrowers’ financial health — seems to have had an immediate effect. “Over 2022, the impact of these changes and anticipation of further interest rate increases are likely to play out in the market, leading to a gradual slowdown in the pace of price growth,” Baird observes.
Auction numbers remained strong in December, accounting for almost 50% of all property sales in Auckland, according to REINZ. For Damerell Group, auctions made up 60% of our sales, with an 84% success rate on the night or before auction. Add to this a 23-day sales cycle (as opposed to an average of 50 days for sales by negotiation), and it's easy to see why auctions remain Damerell Group’s recommended and preferred method of sale.
With many vendors holding off listing their properties until after the holiday season, we are expecting a new wave of homes to come on the market at the end of January and into February. Traditionally, this is a popular time of year to buy and sell, brought about by optimism and expectation of what the new year holds.
Please call us if you are thinking of making a move; we have access to the latest sales data and mood of the market so you can make a well-informed decision about selling.