The overall Auckland market remains tight, with figures from realestate.co.nz indicating that inventory for sale in April was only at 5,711, a 10.8% fall from 6,404 last year’s same month and 45% lower than the 8 year historic average of 10,378. The number of weeks to sell inventory (based on current sales activity, assuming no further listings are taken on) are still on their lowest levels, with the April 2016 figure being 10.3 weeks, significantly lower than the historic 8 year average of 24 weeks. This tightening is also illustrated by the latest REINZ data, which shows an acceleration in the speed of sales in February and March, resulting in the average days on market figure falling to 30 days in March from its 39 days level in January.
As one of the most desirable and affluent areas of Auckland, the Eastern suburbs market trends followed those of the wider region in general, with a relatively higher volatility in price movements. Following a short-lived fall, median prices in the area posted the highest quarterly growth rate in 15 years. The median value climbed by 11.8% or $155,500 in the first quarter of 2016 compared to the previous quarter, reaching a new record of $1.470.000. The median price was up 13.4% from the same quarter of the previous year. Sales volumes were down in the March quarter with 348 transactions completed compared with a 423 a year earlier. Overall however, market conditions in the Eastern suburbs market remain tight as illustrated by the fact that the average days on market figure, at 45 days was only slightly up from the 41 days recorded in the opening three months of last year.
Changes in the annual building consents in the Orakei Ward which encompasses the Eastern Suburbs show that while the supply of stand alone houses remained constant over time, increases were in the construction activity of smaller residential properties including apartments and townhouses. The number of building consents for all types of residential properties increased 52% in 2015, compared to 2014. However in absolute terms, the scale of increase in new building consents in the Orakei Ward was limited to 172, which is unlikely to alter the market dynamics, given the high demand, net migration inflow and low interest rate environment.
A closer look at sales
An analysis of recent sales in Eastern Suburbs reinforces the top end status of the area in the Auckland region, with sales at $1.5million and more constituting half of the sales in the last quarter. Residential properties selling for under $1 million made up only 25% of total sales. In terms of property types, residential houses dominated the sales with nearly 70% of total transactions. Given the heightened building activity in apartment and units in the region, it is likely to result in a reduction in the relative share of stand alone houses in future years in favour of smaller property types.
Spotlight on RemueraFollowing a brief downturn in house prices in line with the trend in wider Auckland region, which can be attributed to the imposition of the new regulatory environment, the Remuera market experienced a sharp increase in the median sales value in the first quarter of 2016. Values climbed by 6.6% or $103,500 compared to the previous quarter, reaching $1,681,000. The number of sales transactions were down 29% compared to the same quarter of the previous year to 108 concluded sales. Overall however, market conditions remain tight as illustrated by the fact that the average days on market figure, at 41 days has remained unchanged compared with the opening three months of last year.
Remuera is experiencing an increased demand for high end residential apartments. The demand coming primarily from baby boomers who are looking to sell their large family homes and move to a lock and leave style property while remaining within the local area. This provides them with the opportunity to enjoy the benefits of lifestyle, leisure and travel while retaining their local connections. This evolving trend is being supported by the development sector which is moving to meet demand through the construction of spacious high quality apartments, an example being the St Marks development at 10 St Marks Road and 464 Remuera Road.
Spotlight on St HeliersThe seaside suburb of St Heliers has experienced a marked increase in values in recent years. Its seaside charm, proximity to the heart of Auckland city, along with a large number of cafés, restaurants, boutique shopping and stunning views of Rangitoto all combining to entice people to live in the area.
Strong value growth has also been apparent within the St Heliers market, as the March quarter median reached $1,460,000, an increase of 16.8% or $210,000 since the end of 2015. The number of sales transactions were down 19% compared to the same quarter of previous year and sat at 55 sales. The average days on market figure recorded in the first three months of 2016 was 47 days, still indicating a tight market despite its slight increase from 42 days recorded during the same quarter of 2015.
Eastern Suburbs Median Price Hot Spots