The Auckland residential market slowed in the final quarter of 2015, reflecting the impact of changes in regulations and the traditional Christmas season slow down. Total sales volumes Auckland wide were down near 20% in December, compared with the same month in 2014. The median value rise was just 0.7% from November. As a result year on year value growth slowed to 13% compared with up to 24% registered earlier in the year.
The North Shore market trends followed those of the wider region quite closely. The median value in the December quarter was marginally down from the September 2015 quarter and now sits at $910,000. Although reasonably flat over the last six months, values have still risen by 13% from the same quarter last year. Sales volumes were also down in the final quarter with 1,083 transactions completed compared with 1,615 a year earlier. While the introduction of new regulations aimed at cooling investor activity imposed by the Reserve Bank of New Zealand (RBNZ) has been a factor in slowing activity, a lack of listings has also played a part. Agency reports confirm that there is still strong interest from buyers in the area however as reported this month by realestate.co.nz the inventory of property for sale is at a record low across the country.
The introduction of new apartment developments to the area along with new projects selling from plans has seen median apartment values rise. The median value rose steadily between late 2010 and mid 2014 but has increased more significantly over the last year to sit at $675,000. The median one year ago was $575,000, equating to an increase of 17%. Apartments and townhouses in the area currently average 33 days on the market before selling.
As stated above the Auckland market has taken a breather over the last 3 months however conditions remain extremely tight with the weeks to sell all inventory figure sitting at just 10.3 weeks against a long term average of 24.5 weeks. The latest figures released by realestate.co.nz show the number of sales in the region to be in line with the long term average of around 2,100 sales. The total inventory continues to hold at low levels as new listings to the market fell short of the historical average with only 2,264 new homes listed for sale in January.Given the population boom driven by a historical peak of permanent migration to New Zealand, where nearly 30,000 have settled in Auckland; over the last 12 months local and central governments continue to target the regional housing shortage. Building consents in Auckland have increased considerably according to Statistics NZ but as yet have not kept pace with demand. The housing shortage, population boom and low interest rates have combined over recent years to put unrelenting upward pressure on prices. Local government in particular is encouraging greater intensification of suburbs to help alleviate this shortage; therefore it is hardly surprising that there have been continual increases in building consents for new apartments, townhouses and units. Annualised consents for these types of buildings in the North Shore Ward are shown in the graph below compared with stand alone houses. Consent activity had been very flat post Global Financial Crisis (GFC) then began rising steadily from the beginning of 2014. Apartment consent activity peaked again sharply at the end of 2015 and should the consent numbers translate into construction activity, North Shore residents will have more options for downsizing to lock up and leave accommodation with more achievable prices than a stand alone home in the region.
The market drivers still in play; a low interest rate environment; continual housing shortage; and record migration levels lead us to the conclusion that there will be further upward pressure on values in the North Shore and Auckland housing markets, albeit that the introduction of greater regulation and the already high level of property values will see percentage growth slowing to single digit figures over the next 12 months.
Spotlight on East Coast BaysThe cluster of small suburbs lining the 9km of north east coast on Auckland’s North Shore have long been desired as an aspirational location to live, given the proximity to beaches and sweeping views of Rangitoto Island in the Hauraki Gulf.
Median sale values for the East Coast Bays grew sharply since the September quarter of 2014 where the median was $770,000 although eased to $975,500 in the final quarter of 2015. This followed a historical peak of $1,065,000 for the three months to September 2015. Although flattening over the past three months; the median for the area still grew 16% compared with twelve months earlier.
Sales transaction numbers also followed the regional trend closely with 304 homes sold in the final quarter of 2015, down from 487 in September. Homes are on average taking 37 days to sell in the East Coast Bays, slightly quicker than for the same period in 2014 when it was 40 days.
Spotlight on Glenfield AreaLocated nine kilometres from the CBD the inland part of the North Shore, the greater Glenfield area encompassing Glenfield and surrounding suburbs including; Wairau Valley, Beach Haven and Birkdale; overall experienced some of the highest median value growth in the North Shore over the past year with annual median growth of 23.2% from 2014 to 2015.
In the final quarter of 2015 the median value of $745,000 followed other local trends and eased slightly from September where it stood at $758,000. However when compared with the three months to December 2014 the median increased 18.3% quarter to quarter, up from $630,000 a year ago.
Sales volumes of 255 in December 2015 are down from 333 on the same period a year earlier, again representing the overall district trend. Days on the market however, are still low, taking on average 34 days to sell a home in the area, showing there is still demand from buyers wanting to purchase properties in the Glenfield area.
North Shore Median Price Hot Spots