• 

  Download Full Report - 245.0kb

AUCKLAND RESIDENTIAL REPORT SEPTEMBER 2007

Slowing Market?

Sales activity in the December 2006 and March 2007 quarters recorded a rebound in sales numbers compared to the previous year. This was to be expected, especially for the March quarter, when a significant 16% drop in activity was recorded last year. Despite the rebound, the actual numbers of sales is still only at around the levels recorded in 2004 and 2005 March quarters. Sales volume was static in the June quarter and is at a similar level to last year. Prices have continued to climb with the latest June 2007 quarter median price of $460,000 a healthy 15% above the same quarter last year.

 

 

The sales data for the above figures was taken from transactions negotiated before the end of June 2007 when, up until 7th June, the Official cash Rate (OCR) was still under 8%. The subsequent increases of the OCR to 8.25% have continued to slow sales activity and price growth. There is already evidence of this occurring in the July REINZ sales statistics with New Zealand wide sales volumes at the lowest level since 2001 and prices static.

The graph (top right) shows the relationship between the median price (line) against the volume of sales (bars) and illustrates that while volumes have gone through stages of easing back and then accelerating, the median price has continued to trend up.

The average days a property is on the market suggests the turnover of property is still strong with the number of days dropping over recent time. In tandem with the increased activity recorded in last three quarters of 2006 and the first quarter of 2007, as would be expected, the average days on the market indicator dropped. We expect the anticipated slower activity in the market will result in the days on the market once again pushing out as the need increases to progress property through the whole marketing campaign period to successfully draw out all potential purchasers.

 

 

The upper end of the Auckland Residential market, measured by Bayleys Research Residential Index as properties with sale prices in the Top 15% of the market which currently represents sale prices in excess of $750,000, is continuing to perform well. The median price within the Top 15% is gradually moving towards the $1,000,000 barrier with a current median of $965,000. Considering back in the March 2000 quarter, the median was still under $500,000 at $495,000, the growth of the upper end of the market has been very strong. This is clearly shown in the 520 $1 million plus dwelling sales that took place in the Greater Auckland area in the June 2007 quarter. The acceleration of properties selling in this exclusive price bracket has rocketed over the last 6 quarters, going up from 261 sales in the March 2006 quarter to 358, 374, 477, 496 and current 520 in subsequent quarters. This supports the theory that this top end of the residential market is not influenced by the same drivers as the market in general, with many buyers being in non wage and salary positions where business conditions and profitability are the key.