When it comes to assessing the state of the property market, it’s worth remembering that there is no ‘one market’ and at this moment this could not be truer. For whilst the media is reporting that Auckland house prices are flat or falling, when you examine the local Devonport market that is not the case.
The fact is that Auckland is not one property market; nor is the North Shore. To really understand the property market, you have look at individual suburbs and even categories of property sales within a suburb. This is best demonstrated in this chart below which tracks the 12-month moving trend of median sales price for just houses; comparing Devonport with the North Shore and wider Auckland region. Whilst the median sale price across the Auckland region remains flat as it has for over 2 years now, and the North Shore slips lower, Devonport median house prices have rebounded.
The median sales price of Devonport houses began to ease, back in March 2018, just as North Shore house prices were easing. Across the wider Auckland region prices had already at that stage plateaued some 12 months earlier. Devonport median sales price fell for the next year until in April of this year a recovery began. Recoveries can be false dawns; however, 4 months later the fact is prices are continuing to rise. Certainly, as yet prices have failed to recover all of the fall of the prior year, but current median sales prices are now within 3% of the peak, having fallen by 10%.
This recovery of sales price for houses is though set against a backdrop of low sales volumes. In the past 3 months just 23 houses sales were recorded (down 30% year-on-year) with just 25 new listings. Traditionally price increases follow increases in sales volumes, but at this time the low turnover would appear to be the driver with stronger demand set against limited options of property for sale leading to this pricing pressure.
The market is without quieter in terms of turnover than has been seen for many years. Earlier this year this slow sales was facing off against a fast flow of new listings, that resulted in a steep rise in inventory which at one point topped 83 properties for sale across Devonport - a record. Skip forward 5 months and that surplus inventory has all but been absorbed through steady sales and slower levels of new listings to the situation where 46 properties were for sale at the start of September, pretty much in line with this time last year. The next 3 months are certainly going to be interesting to see to what extent the traditional rise in new listings copes with the demand that is certainly in the market from buyers.
The key statistics of the Devonport market are detailed in the table below and show that whilst the segment of family homes is highly active it is not reflected in other segments.
The market for owner-occupied and investment units continues to show growing interest with sales volumes up 24% year-on-year, however this is off a low base, and availability is affecting this segment with no available units on the market at the end of August. For whilst sales have grown the median sales price remains weak showing a 6% decline vs. last year at $642,250, well down from the peak of the late 2017 when prices topped $900,000.
With the start of Spring, the market has been buoyed by a raft of new listings with 11 in one week, more than the total of the prior 5 weeks, more choice is sure to come in the next few weeks, setting the scene for an interesting Spring market.