The number of apartments listed for sale in June was almost double that of May, says Vanessa Taylor of RealEstate.co.nz. In June, 800 apartments were listed on its website compared to 453 in May.
Taylor says the average asking price for an apartment in Auckland is $679,170 and believes apartment prices are dragging down average home prices across the city.
However, the banks are playing hard to get, loan to value ratio rules are biting investors and foreigners are still coming to terms with having to open a local bank account to buy property here. Right now, cash is king.
And while some apartments may be cheaper than freehold houses, apartment buyers need to consider annual body corporate fees and ground rent for leasehold properties.
Andrea Rush of Quotable Value says there is anecdotal evidence from valuers and estate agents that property values have dipped in the past three months. Areas taking a hit include Auckland City East and South; Waitakere, Manukau-North, West Papakura, Franklin and Auckland City apartments.
Consents falling short
The total for dwelling consents in the 12 months to May rose to 10,379 in Auckland, 5000 short of what was needed. Westpac economists say there is an overall shortfall of 35,000 homes, and believe Auckland’s housing shortage will get worse before it gets better.
They say many apartment developments have been cancelled due to funding difficulties.
Standards New Zealand has raised the safe limit of Meth contamination in residential housing to 1.5 micrograms per 100cm squared — up from 0.5.
The standard covers what it calls acceptable levels of methamphetamine residue in bedrooms, living areas, kitchens, sheds and garages following decontamination of an affected property.
First National Real Estate CEO Bob Brereton compares the Meth situation to the leaky home syndrome saying contaminated properties will likely sell for less than a comparable “clean” property.
He says any level of Meth or P residue in a home should be disclosed to potential purchasers by real estate agents. The Meth problem is now so widespread that buyers should carry out their own tests before agreeing to buy a property.
Press release (Barfoot & Thompson)
Auckland Property Prices Respond to Low Sales Numbers
Lower sales numbers are finally having an effect on Auckland residential property sales prices.
“In June the average sales price was $913,606, a 3.1 percent fall on the average price for the previous three months, and only 0.6 percent higher than it was 12 months ago,” said Peter Thompson, Managing Director of Barfoot & Thompson.
“The median price for the month was down 2.9 percent on the average median price for the previous three months and the same as it was for the same month last year.
“While prices invariably fall as we head into winter, June’s results confirm that prices are definitely falling.
“Monthly sales numbers have been below the previous year’s numbers for nine consecutive months, and that is finally having an effect on prices.
“What is positive for the market is that prices are edging down rather than falling rapidly, and at current prices still represent a good outcome for vendors.
“Sales numbers in June at 855 were down 3.5 percent on sales in May and down 26.8 percent on the number in June last year.
“Sales for the month were their lowest in a June for seven years.
“New listings last month at 1570 were relatively strong and the listing numbers at month end at 4297 were the same as the previous month.
“That total listings have not risen as sales numbers have fallen is because some vendors have taken their property off the market.
“Taking property off the market when prices are not rising is a common trait in Auckland and will contribute to prices remaining stable through to September’s election.
“There was a good balance of sales across all price ranges in June with the sales numbers for property for under $750,000 representing 41 percent of all sales.
“291 sales or 34 percent of all sales were for property over $1 million and of these 39 or 4.6 percent were for property selling for over $2 million.
“In the Far North rural sales remain strong with demand for dairy farms remaining high.
“Family buyers and developers continue to be active in the lifestyle and city fringe markets, with new listings in this rural category being lighter than normal.”