Auckland Property Market on the Rise
The recent official cash rate (OCR) cut has breathed new life into the housing market, setting the stage for a more dynamic spring and summer. This monetary policy shift has triggered a surge in activity from buyers who had previously been inactive, leading to promising signs across the real estate sector.
Auckland's Real Estate Market Shows Positive Trends
Peter Thompson, Managing Director of Barfoot & Thompson, reports that Auckland’s property market is experiencing significant improvements. In August, Auckland saw 889 property sales, marking the highest number of August transactions since 2021. The city also recorded 1,454 new property listings, the highest for any August since 2017.
Although the median sales price in Auckland dropped slightly to $952,500, down 3.1% compared to the previous year, Thompson suggests that the market is stabilizing. “As mortgage rates ease further, we can expect increased market activity,” he stated.
Nationwide Buyer Activity on the Rise
The boost in market activity isn't confined to Auckland. Sarah Wood, CEO of property website realestate.co.nz, noted a spike in property searches and saved listings following the OCR cut. “Kiwis' passion for property remains strong,” Wood said. “Our data indicates that many have been waiting for the right moment to act.”
August saw stock levels dip below 30,000 homes for the first time in six months. Additionally, properties are being listed for shorter periods, with an 11.6% increase in homes selling in under a month. These trends suggest a quicker-moving market and potential changes ahead.
Market Stability and Emerging Opportunities
The national average asking price has remained steady around the mid-$800,000 mark. According to CoreLogic Chief Property Economist Kelvin Davidson, there are several positive indicators for prospective buyers. Property values are stabilizing, first-home buyers continue to hold a significant market share, and mortgage rates are expected to fall further.
Davidson explained, “With inflation trending back towards the 1% to 3% target range, mortgage rates could potentially drop to around 5.5% by the end of 2025. While we’re seeing a turning point in mortgage rates, a major market boom seems unlikely due to ongoing economic challenges.”
Regional property value changes vary, with Wellington seeing a 21% drop from its peak and Christchurch experiencing a 7.1% decline. In Christchurch, first-home buyers make up 28% of property purchases. Davidson anticipates that first-home buyers will remain active throughout 2024, supported by KiwiSaver funds and favorable lending conditions
Insights for Investors and Home Movers
As mortgage rates and rental incomes converge, ‘mum and dad’ investors may become more active in the market. Additionally, a backlog of demand from those looking to move house could lead to increased activity.
Davidson forecasts, “As more owner-occupiers sell their homes, we could see stronger movement in the market over the next 12 to 18 months.”
In conclusion, the housing market is showing encouraging signs of revival following the OCR cut, with increased activity and potential opportunities for buyers and investors. Keep an eye on the market trends as we move into the vibrant spring and summer seasons.
Source: Original article by Esther Tauntons - Click here