Do you have a house for sale in Auckland, New Zealand? After a decade of breathtaking double digit growth, Auckland property market has peaked and has been cooling down in the last 6 months. Should you panic and try to sell your property in Auckland, New Zealand fast?
There is no reason to panic as yet, says Real Estate Institute chief executive Bindi Norwell. She says that while sales volumes in Auckland are down by over 33% in 2017, there is no reason to get overly anxious about it as yet.
Ms. Norwell said, “We know that it's winter and the election is just two months away now, which typically impacts the number of properties sold in the market. The number of properties sold across the country is the lowest we've seen in the month of June for three years now – particularly in the $500,000-and-under property price bracket."
She added, "This slow-down in transactional activity, but stabilising price trend highlights the underlying dynamics between housing demand and housing supply, with population growth continuing to rise faster than building consents and dwelling supply."
According to Ms. Norwell, the problem seems to be that banks are getting more cautious with their lending, especially because the average person in New Zealand is already highly leveraged in the property market.
However, Ms. Norwell hastens to add that the talk of falling prices is premature. Auckland still remains steady, she said. "The data also shows an emerging trend of section sales in Auckland occurring more quickly than dwelling sales, highlighting that demand for sections is still rising in Auckland while demand for dwellings is easing," Ms. Norwell said.
Leonie Freeman, a top real estate expert in New Zealand says there is no risk of a property market collapse as yet. She said in an interview on The AM Show, "Housing has always followed a cyclical nature, and what we're seeing at the moment is perhaps the end of, or perhaps getting towards the end of the latest cycle."
"When you look back in the past, the markets turn usually because of some global event. Last time it was the global financial crisis, and then that impacts the property market. So we do think at some point that will happen." But such a crisis is not likely to happen as yet, Ms. Freeman said.
"What you typically see is when the market turns, the market does soften. You see sometimes that the prices might go down slightly, but we haven't seen great crashes. What you see is people who own a house just hunker down - if they don't have to sell, they just hunker down," Ms. Freeman explains.
Nigel Jeffries, head of Trade Me Property says that his data indicates that the average asking price of a New Zealand property has declined by 1.2% in June 2017 to $632,850. The fall he says is across the country, not just in Auckland. But since home prices in Auckland have risen the most over the past decade, the decline here has been the sharpest.
Mr. Jeffries adds that there is no reason to panic for those that plan to buy property in Auckland, New Zealand online this year. "The average asking price is still up 7.1 per cent on this time last year, but the rate of increase is down from 12 per cent at the start of the year. It means the significant capital gains of recent years are slowing down but if you're looking to buy it will be welcome news that the deposit you require isn't surging at the insane rates we've been seeing."