June 2018: Winter brings a paucity of new listings as property prices dip

The month of June will be remembered for the extreme shortage of new listings. Just 10 properties were placed on the market for sale across the Devonport peninsula in the month, down from 26 in May and compared to the November peak of 32 properties.

This shortage of new stock is facing off against a steady pace of sales; which for the past 3 months showed no change from a year ago with 50 transactions in the 3 months to June. This situation of very low listings and robust sales has depleted the available selection for the active buyers, who are still very much evident in the market. This saw the month open with 49 properties available for sale, and 4 weeks later that number had fallen to just 35.

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The median sales price over the past 3 months is down 2%, reflecting the underlying trend of property prices across the wider region which is best described as subdued. The median price of all property sales over the past 3 months was $1,485,000.

Total property in Devonport June 2018 variance of sales vol and median price.png

HOUSE SALES

Total house sales of 39 in the 3 months to June was up 19%. The median sales price of these houses was $1,750,000 down 4% when compared to the same time a year ago. This fall in the median price is just the 5th time in the past 5 years that house prices have adjusted downwards, however this is consistent with the broader reports for property sale price across the North Shore and Auckland more generally.

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UNIT SALES

The key driver of the market for investment and owner-occupied units in Devonport is the rate of sales. Just 3 sales have been recorded in the 3 months to June down a whopping 65%. The past 12 months has seen just 15 sales of units compares to a total of 43 sales this time last year. The impact of these declining sales has seen the median sales price slip 15% when compared to a year ago falling from $827,500 to the latest 3 months at just $700,000.

Please note however that such low level of sales can significantly effect median prices. The most recent 12 month median sales price of units was $780,000.

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May 2018: Continued demand, matched to tight inventory keeps driving sales price

The Devonport property market enters Winter after what could best be described as an active Autumn. The trend for property sales remains steady with 59 sales concluded in the 3 months to May. Tracked over the past 12 months the total of sales at 202 is exactly the same as May last year. The median sale price is up, reflecting the demand in the market with an 11% rise to $1.75m. This places the local market in line or slightly ahead of the wider Auckland market where sales volumes have started to pick up but where median prices remains fairly static. This reinforces the view that Devonport remains a suburb in demand with a steady pool of active buyers.

Devoport property market in May 2018 analysis.png

The available inventory of properties on the market rose slightly in May to end the month at 49, an increase of 7 properties from April. This was largely the result of a higher level of new listings coming onto the market, 74 new listings in the past 3 months. This is encouraging for those buyers out there, as it offers greater choice, something the market has been lacking for the past few months. However the seasonal trend is to see fewer new listings over the Winter months, so it will be interesting to see how the levels of available inventory levels look as we emerge from the Winter months and hit the Spring market.

 

HOUSE SALES

The median sales price for house sales over the past 3 months topped $1.9m representing a rise of 9% year-on-year. Sales volume for the 3 months totalled 47 which represent a significant increase of 16% when seen as a moving annual total of house sales as compared to the same time last year. A strong rise in new listings added to the available selection across all price ranges resulting in a total of 39 houses for sale at the end of May.

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UNIT SALES

The market for investment and owner-occupied units remains subdued. The level of activity is sparse with just 7 new listings coming onto the market in the past 3 months and just 5 sales. This time last year there were 17 sales. This slower market is having a consequential impact on the median sales price which remains static for the fourth consecutive month at $780,0000, down 7% on the same period last year. With just 5 units on the market for sale at the end of May heading into the winter months it is not likely that the market will bounce back anytime soon.

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April 2018 : Heading into winter the Devonport property market for houses remains active

The local Devonport property market is best described as active as we head into the winter period, a time typically thought of as a quiet period of the property year. It is interesting to what extent the perception of a quieter property market over the winter is refuted by the facts. I would recommend you have a read of a recent article I wrote on the analysis of seasonality in the property market "So... Should I wait to list in the Spring?" on my Properazzi site.

In the latest 3 months to April, 51 properties were sold across Devonport which added to a total sales of 208 for the most recent 12 month period, this represents a rise of 6% in sales as compared to this time last year.

Devonport property summary data April 2018.png

The future trend as far as sales volumes is concerned is becoming clearer. Sales have been falling for the past 18 months across the country and across the wider Auckland market, however the bottom of the sales cycle has appeared as we headed into 2018 and that is shown in the analysis of the latest sales figures from across the region which I recently published in a quarterly market commentary. Interestingly comparing Devonport sales data with the wider market shows some interesting variances . In April property sales across the Auckland region were up 2% but the North Shore district saw sales down 11%, whilst as stated Devonport sales were up 6%.

Property sales volume data should be seen as a lead indicator of the market; with the median price a following indicator, being as it is a reflection of the market demand and supply. As for median price, the 3 months to April in Devonport saw median prices rise 2% to $1,535,000, this compares to a 1% fall across the wider North Shore and a similar 0.6% fall across the Auckland region, again showing the importance of hyperlocal property data to fully appreciate the market when marketing a property for sale.

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Over the past 3 months the sales total of 51 properties has represented a clearance rate of 67% of the 76 new listings that have come to the market supporting an inventory at the end of April of properties, down from the 43 at the end of March.

In aggregate the property market in Devonport looks to be fairly active, however as ever underlying the total is the very different dynamics of the key segments of both house sales and unit sales.

 

HOUSE SALES

In the past 3 months ending April, sales for all sizes of houses totalled 38, adding to a 12 month total of 169 sales. This represents a rise of 23% compared to this time last year. The market continues to be active, with a strong flow of 56 new listings coming to market over the past 3 months with a clearance rate of 68%. The inventory of available listings of houses at the end of April totalled 33, the same as at the end of March.

A noticeable trend over the first few months of this year has been the metric of 'time-on-market' measuring the elapsed time from listing date to unconditional date. As the adjacent chart shows the time-on-market for Devonport houses has begun to reduce, if seen from the longer term perspective. Most noticeable is the significant spike seen in Spring 2016 through summer 2017 as the market  slowed, this was followed by a significant reversal as 2017 progressed, although current levels demonstrate that the market is far from the level of activity seen over the 2015/16 period.

The median sales price continues to edge up to $1,848,500 in April, an increase of 4% adding close to $100,000 over the past year.

Devonport houses median sale prices 5 years to April 2018.png

UNIT SALES

As I have outlined in previous reports, the local market for investment and owner-occupied units continues to be weak, with just 7 sales in the past 3 months. This represents a fall of 45% and such volumes pale into comparison to levels of 15 to 17 sales over the same period last year. New listings are at the same time weak with just 10 new properties brought to the market in the past 3 months with an available stock of just 4 at the end of last month. These metrics undoubtedly tend to lead to a weaker median sales price at which for the 3 months to April was $781,500 down 6% compared to last year.

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March 2018 : House prices continue to edge upwards

Those days of a red-hot Devonport property market through 2014 to 2016 are now well behind us, as are the double-digit percentage price rises that were experienced back then.

Today the Devonport property market is best described as steady. Such a market though offers benefits for both buyers and sellers, allowing more time for consideration and contemplation.

The challenge for buyers today undoubtedly remains the level of available stock. At the end of March there were just 43 properties on the market down from 48 last month, these levels remain low compared to historical averages. For sellers the main issue is pricing. Median sales prices are still rising albeit at a slower rate, so the issue is all about setting a clear price expectation. In the past 3 months median sales price for all Devonport property edged up 4% to $1.58m, a rise of $68,000 over the past year. In terms of the number of sales, activity is relatively healthy with 53 properties sold in the first 3 months of 2018 up 6% year-on-year.

In summary, if price expectations are realistic to this changed market situation then there are buyers out there looking to move.

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Houses

Looking at the specific market for house sales. The median price for all houses sold in the first 3 months of this year was $1.84m up $90,000 as compared to this time last year. In total 41 houses were sold in this period as compared to 35 for the same period last year a rise of 12%.

This level of house sales for the first quarter of the year is pretty much in line with the long term average of the past 10 years at 40 sales. This indicates that the Devonport market is sustaining a stronger level of current activity than other parts of the Auckland region which for the first quarter of this year is down 18% compared to the long term average.

Devonport property house median sale price March 2018.png

 

Units

The market for investment and owner-occupied units is however a very different story to house sales. In the past year total sales of units have fallen from 34 sales in the 12 months to March 2017, to just 24 sales in the most recent 12 months; a fall of 24% year-on-year. The median sales price is currently fairly weak down 4% comparing the first 3 months of this year to the prior year at a level of $776,750.  

Devonport property unit sales and median price chart March 2018.png

February 2018 : Slow property market still shows signs of life .. and demand

Traditionally the 3 months of December, January and February are the quietest of the year for property sales, and this year is no different with just 36 sales across these 3 months. This does though represented a small, but significant rise of of 2%. This variance is based on the most recent 12 months total property sales in Devonport which totalled 216 properties sold in the year to February. Interestingly the highest 12 month total sales in the past 5 years was 263 in the 12 months to September 2015; and the lowest level? The 12 months to April 2017 at just 196. So clearly this current market is amongst the slowest we have seen over this period.

In terms of inventory of properties to choose from, Devonport buyers continue to see slim pickings with just 52 new properties listed in the past 3 months, leading to a choice of 48 properties on the market at the end of February. Turnover of properties remains healthy with few properties on the market for longer than 60 days.

Houses

In terms of price trend, the upward spike of median sale price of houses in January was not as expected sustained and eased back from that record $2m level to $1.8m, however the trend in median price for houses continues to climb, indicative of the market demand with a year-on-year increase of 4%.

Units

The market for investment and owner-occupied units has really slowed over the past 6 months. Sales in Devonport in the three months to February totalled just 3. For the past year the total amounted to 28 units sold representing a fall of 18% year-on-year. At 28 sales in the past 12 months, this total falls well short of the peak activity in the winter of last year when the annual total topped 43 sales in the year to July, just showing by how much the turnover in this segment has slowed. The result of supply side constraints as much as demand with median prices at $781,500 down just 2% year-on-year. 

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January 2018 : Median sale price for Devonport houses breaks through to a new high of $2million

The new year has brought with it a new record in the sales price of classic Devonport houses for the 3 months ending January. Compared to this time last year, the median price of house sales is up 28%, breaking through the $2m barrier for the first time. As we know from past experience, the median price may well dip down below this level in coming months, but the underlying trend remains strong. Interestingly, it was back in back in early 2011 that the median price of house sales broke the $1m level for the first time.

Set against this rise in median price, is the continued quiet level of overall sales, with just 43 properties sold across all property types in the past 3 months, such rising prices and weak sales ably demonstrates the continued strength of buyer demand.

As is expected in January, a fresh new batch of listing hit the market, however with a total of just 57 listings coming to the market across the 3 months, it failed to make a significant impact on inventory which at the end of January standing at 38 was only slightly improved from the 32 at the end of December.

Property sales volumes coupled with low numbers of listings continue to be the key driver of the market at this time, comparing the start of this year with the far more active period of 3 years ago certainly demonstrates this. Back then in 2015, 3 months sales at the start of that year topped 69. Indications for the balance of this year are that we are likely to see a steady market, as access to finance improves and interest rates look to remain stable.

Whilst Devonport houses show continued median price strength, the slower activity in the market for Units is having a dampening effect on median sale prices, which for the past 3 months shows a 11% fall as compared to this time last year, with total moving annual sales at 27 which is 16% down compared to this time last year.

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December 2017 : Median prices remain strong in spite of weaker sales volumes

The last month of the year always sees a slowing of the property market and fore-shadows the quiet month of January before the market bounces back for the key summer months of February and March. This year the trend witnessed in the past few months continues, with weak sales volume across all property types down 2% compared to last year with just 58 sales in the final quarter of the year. The recovery in sales volumes in November seems to have failed to sustain and we appear to be stuck back in a quiet market.

What is significant though is the weakness in inventory, which finished the year with just 32 properties of all types on the market, such slim pickings for buyers is clearly the key behind the strength in sales prices, which for all property types across Devonport saw a 18% rise against last year at just over $1.6m.


The market for units appears to be fairing slightly worse than for house sales, where the sales volumes have eased significantly over the past 6 months after what was a sustained period of strong sales growth - peaking with a 62% year-on-year growth back in May. As the volume growth has come off, so has to some extent the median price, which was showing strong growth of around 20+% through much of 2016 into 2017, but has slowed to a much lower rate of growth and turned down into a decline in prices in the second half of 2017.

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November 2017 : Active market heads to the close of the year

The 3 months of September, October, November traditionally represent one of the two most active periods of the property year with a real sense of Spring, heading into great Summer weather which tends to infect the property market with a strong shot of adrenalin. This year, whilst overall activity is not as high as has been the case as compared to say 2015, we are seeing growing sales volumes of properties sold in Devonport and strength of median prices clearly indicating a strong buyer demand.

Total property sales in the 3 months to November at 66 contributed to the current annual total of 225 property sales up 10% on the same period last year. Whilst at the same time median prices of all property types across Devonport continued what has been a positive trend rising 17% in the past 3 months to $1.583m.

Units

The market of investment and owner-occupied units in Devonport continues to come off what was a strong market through much of the past 18 months, but recent months have seen a significant slow down in the level of sales. With just 4 sales in the past 3 months adding to a year-to-date total of 28, which represents a 20% fall as compared to this time last year.

As the volume has come off this segment of the Devonport market, the median price has eased considerably sitting at a level of $866,000 now for the past 3 months and representing a figure almost identical to November last year, a far cry from the heady market rises seen during 2016. As the market has cooled so has availability, although in such tightly held markets it is often the result of a lack of listings which precipitate the lower sales, time will tell going into 2018.

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