Lies, damn lies and statistics – the real estate industry is full of all 3, but mostly the latter.
Everyone interested in, or owning Auckland Property, tries to get a handle on trends regarding value, volume of sales and days on the market.
Those in the sales side of the residential Auckland property market have a vested interest in spruiking the figures; in their view, it appears that despite European economic difficulties, employment and fiscal issues in Europe, or difficulties in China and the East, the sun never sets on the Auckland Property Market.
Others on the service side of the industry such as those who operate real estate websites, are keen on gathering data and making pronouncements about whether the market is a ‘buyers’ or ‘sellers’ market, and whether Auckland Property is moving upwards or downwards.
Unfortunately for the average buyer or seller, such data is such an enormously blunt instrument as to, at best, be of little value, and at worst be dangerous if forming a part in a decision to either buy or sell.
Firstly, there is no such thing as an ‘Auckland’ property market.
Residential Auckland is made up of a large number of ‘villages’, each with its own trends and influences.
Buyers in say greater Ponsonby or Remuera who believe the statements about dropping values and who make the decision to wait before purchasing will find they face at least a 5% increase (and probably more) in value over the next 12 months.
Similarly, the decrease in other suburbs will be far greater than any figures based on global Auckland property figures.
Apartments in the CBD are also lumped into regional figures.
This market is unique and bares little relationship to any trends in areas with 100 year old villas, 80 year old bungalows or 10 year old homes in contemporary suburbs.
The oversupply of 5 years ago has been replaced with a lack of supply from 2010 onwards.
This lack of supply will continue for some time, caused by an increasing demand as young kiwis increasingly look towards the lifestyle offered by inner city living and the natural lag in supply as developers, burnt by the 2007 GFC, remain hesitant at taking a major financial risk.
The natural lag in the resource consent/construction phase means that supply will be limited for some time, putting upwards pressure on values.
At the same time, owners or developers sitting on new homes in the outer Auckland fringes can only look on in envy as their homes languish on the market for long periods awaiting buyers.
Auckland Property data may have some value for global, population or town planning decision making, but for the ordinary buyer or seller such data may lead to incorrect decisions and actions.