People keen to get ahead of the Auckland property market have been jumping in to buy apartments off the plans, frequently before the ground has been broken.
Barfoot & Thompson director Kiri Barfoot says her firm typically sells between 20 and 28 per cent of all the yet-to-be-built developments it markets within the first month of them being advertised.
As an example she points to the development at 132 Halsey Street near Viaduct Harbour, almost 80 per cent of its multimillion dollar apartments were sold before the diggers moved in.
Looking across the super city, Kiri says that while Auckland property prices are still creeping up, the number of homes being sold has dropped.
Her firm saw 986 sales in November, down 7.7 percent on its October figure, and the lowest number of sales in a single month since February.
Most noticeable was a drop in sales in the $500,000 to $750,000 price range. In November 286 homes were sold by the firm in this category, compared to 353 in October.
The price band is popular with investors who own less than three properties, says Kiri.
Chris Kennedy, CEO at Harcourts, believes the recent softening of the Auckland property market will be short lived.
He suspects buyers are just figuring out how the recent law changes will impact on them. “Then it will be business as usual. There’s no need to panic,” he says.
Kennedy says the key figures to consider are the amount of property on hand, which dropped again last month, the number of sales and average property prices, which are both up.
He says: “That indicates there is plenty of activity still in the market, and demand is still outstripping supply, keeping prices up.
“The pace may have slowed a little, but we’re still very much heading in the right direction.”
Anonymous real estate industry feedback to an ANZ business survey reveals an interesting picture of the Auckland property market.
One respondent has seen a “huge drop off” in interest from local and off-shore buyers.
“Is it a speed bump or a structure shift? We won’t know which way the market will turn until February,” they say.
One North Shore agent says business is steady with strong demand for realistically valued properties, and a Rodney based real estate agency says it’s “very hard to obtain new listings”
Price expectations of many vendors “still remain inflated”, says one Auckland agent. The general feeling seems to be that buyers are not rushing to put offers in like they were three months ago.
Further afield, agents in Hamilton City are seeing high demand across all price ranges, with low stock levels leading to multiple offers on properties.
First published in the New Zealand Herald.