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30 June 2022

Property market update - June

Each day we are greeted with a new headline about the fate of the New Zealand property market. Emotive as they are, regularly, these headlines are followed by a question mark.


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The reason being, that over the past couple of years, the reality of covid has taught pundits a key lesson: don’t tie yourself to your prediction. More often than not and spectacularly so at the beginning of the pandemic, all of these predictions have proven to be incorrect. 

There is no doubt that we continue to live in the all encompassing ‘unprecedented times’ that are so often referred to, but is that precisely the reason why maybe all of the fear grabbing sensational headlines should hold even less relevancy than usual?The reality is, that at best most commentators are taking an educated guess, based upon what has occurred in the past. But if the times are as unprecedented as we are led to understand then we are all stepping into the unknown in unison.

A few weeks ago, Auckland awoke to a thick blanket of fog across the city. Flights were cancelled and motorways were clogged by slow vehicles whose drivers couldn’t see much further than a few car lengths ahead of them. It is this reduced visibility that caused air traffic controllers and vehicle drivers to respond more carefully, to be more conscious of their surroundings and to not take unnecessary risks when the outcome was less predictable. Why are we talking about the weather you ask? Well, it is also representative of the real estate market at present, there is a bit of fog about.

Over the last two years, the sun has been shining, the real estate highway has been wide open and it has allowed property to transact at speed. Owners needn't worry about whether there were enough buyers, whether the marketing was perfect, or if they were selling in the traditional ‘high season’ as the outcome was predictable, more buyers than there were homes for sale. When outcomes are less certain, those looking to transact are naturally more cautious. They are selective about their timing in the market, about their advertising, the salesperson and agency they select and the method of sale they commit to. All of these are crucial factors that deserve due consideration right now.

So, while we rarely attempt to predict what the market may be doing in six or 12 months' time, what are we seeing right in front of us at the moment? Over the past week, the majority of buyers across Auckland have been owner occupiers, representing 63.2 percent of transactions. Investors represented 31.6 percent of buyers this week. What this tells us, is that most of those that are in the market at present are transacting for genuine reasons of circumstance, whether that is upsizing, downsizing, relocating or otherwise. 

Of the properties we have auctioned across our group in the last seven days 73.6 percent of these have seen active bidding, or the opportunity for an owner to consider selling. That being said, 47.3 percent of owners who took their property to auction this week decided to sell on the day, which may indicate that in some cases there is still some differing opinion when it comes to value between buyers and sellers. Among the Damerell Group offices, we are still seeing that owners that take their home to auction are receiving proportionally higher traffic through their property and fewer days to sell - 33 days by auction and 50 days by private treaty (negotiation or price).

So while the headlines of commentators' predictions around what the market may or may not do over the coming period of time will continue, it is important to remember that most are simply finding their way through the fog.

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