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 Ponsonby and surrounds (Freemans Bay, St Marys Bay, Herne Bay, Westmere, Pt Chevalier and Grey Lynn) market trends followed those of the wider region quite closely. The median value in the December quarter was practically unchanged from September 2015 and now sits at $1,360,000. Although flat over the last three months, values have still risen by 17% from the same quarter last year. Sales volumes were also down in the final quarter with 197 transactions completed compared with 279 a year earlier. This figure is also put down to a lack of listings in the region. Agency reports however confirm that there is still strong interest from buyers in the area.Sales activity is being supported by an increase in housing options within the local suburbs as new apartment developments are brought to market. This has allowed local residents the opportunity to downsize within the local area, an attractive option for those who do not want to leave the locality.
The introduction of new high quality apartments to the area along with new projects selling from plans, allied to strong purchaser inquiry, has seen median apartment values rise. The December quarterly median value of $805,000 is up 8% on the September 2015 quarter where the median stood at $745,000. An apartment or townhouse currently averages 45 days on the market before selling.
Value appreciation of median house prices year on year for each suburb in this location show Ponsonby fringe suburbs values were driven up the most proportionately from 2014 to 2015. Grey Lynn, which ended 2014 with a median value of $940,000 for the twelve months grew by nearly 36% finishing 2015 with an overall median of $1,277,500. Grey Lynn started from the lowest base value at the end of 2014, when demand for more affordable property in the Ponsonby vicinity including apartments and townhouses, increased, placing upward pressure on prices in the suburb.
Westmere also improved, up nearly 30% from 2014, with an annual median value of $1,555,000 for 2015. St Marys Bay, widely known to be one of New Zealand’s most affluent suburbs has not seen percentage growth as substantial over the year, hardly surprising given that the median ended 2014 at over $1,600,000. As a result annual growth of 8.2% still equates to a $132,500 increase in median values.
As stated above the Auckland market has taken a breather over the last 3 months and this is reflected in a slight loosening of market conditions, illustrated by weeks to sell all stock easing from 9.6 weeks to 12.5 week albeit this still sits well below the longer term average of 24.6 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 1,800 new homes listed for sale in December.
Given the population boom following 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 has been continual increases in building consents for new apartments, townhouses and units. Annualised consents for these types of buildings in the Waitemata Ward which encompasses Ponsonby and the surrounding suburbs are shown in the graph below. Activity had been very flat post Global Financial Crisis (GFC) then began rising steadily from the beginning of 2014. Consent activity peaked between July and October 2015. Should the current level of these consents flow through to the construction activity it would certainly change the demographics of Ponsonby and surrounds, where historically there has been mostly stand alone homes in village type communities.
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 Ponsonby 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.
Ponsonby & Surrounds HOT SPOTS