Auckland Housing Market Defies Forecasts with a 30% Price Hike

  • By Hadar 20th Jul, 2021
    Auckland Housing Market

    The Auckland Housing market has baffled pundits and consumers alike by rising 28.7%, against all expectations and forecasts. This spelled a national median of $820,000 by June, according to institutional real estate news agencies. At least five out of sixteen regions in NZ have hit new median prices for housing; one region held on to the same median value, while twenty others rose to record highs. Auckland is one of them. The Auckland housing market clocked a 25% increase in price, which placed its new median at a record $1,150,000 in June.

    Median hikes outdoing expectations and buyer sentiments

    Following Auckland’s suit, Marlborough raked up a median hike of 56 percent to $705,000, Waikato rose by 19.7% to $736,000, Taranaki by 41.5% to $580,00, Southland went up by 23.2% to $420,000, and Manawatu/Wanganui by 35.6% to $580,00. The Auckland housing market news agency also reported an increase of 0.3% nationally, in the month-on-month median data. More than half of the regions reported a decent uptick in the median value, in comparison to the previous fiscal quarter.

    The demand for premium housing now has left the supply far behind, much to the chagrin of bargain-hunters. However, the Fear-of-not-finding-anything or FONFA is driving buyers to lap up the units even with the hike in the median value. The 7345 properties sold across NZ, in June 2021, increased by 6.2%, from the 6913 units when compared to June 2020 data. This broke a five-year record high for the month of June. Auckland alone reported a hike in the no. of properties sold, from 2144 to 2766, a fifteen-year record high. Hence, the experts were quick to offer an addendum to the Auckland housing market predictions and forecast a strong market in the months to come, unless there are any significant changes to fundamental market factors, such as mortgage rate rises and cash rate hikes.

    Auckland Housing Market drives housing sales in other NZ regions

    Market reports suggest that another 6 out of 16 regions depicted an increment in the housing sales volumes. Northland, Taranaki, Tasman, Canterbury, and Nelson took inspiration from the Auckland market and responded to the reintroduction of the loan-to-value ratios in March, with a strong, seller’s market.

    Brokerage agencies have confessed that open houses and auctions seem to be attracting a respectable amount of footfall across the country; negating the winter slow-down norm usually witnessed around this time of the year. There has also been a nationwide drop in the median no. of days to sell a property, from 46 to 31, another five-year, record-breaking figure. Plus, about 27% of all properties listed were sold at auctions, outdoing the 10.7% of last year.

    Thus, FONFA managed to eek the demand well above supply, as availability decreased by 33.3% on a nationwide scale, in June. It went down from the 20,772 of June 2020 to 13,861 this year; the 2nd lowest after Dec 2020’s 12,932.

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