The CoreLogic Suburb Scorecard shows that the tightening in available listings across Auckland has been clear in suburbs such as Otara and Stanley Point. Meanwhile, days to sell has dropped in suburbs such as Glen Eden and Otahuhu. The overall message from these geographically granular indicators is that property values look set to continue to rise in many parts of Auckland for the foreseeable future. However, stretched affordability and strong construction activity will be long-term restraints.

 

Auckland average property values
Auckland average property values (Source: CoreLogic)

Auckland’s residential property market has clearly turned a corner in the past 3-6 months. After seeing average property values fall by about 3% from peak ($1,055,831 in March 2018) to trough ($1,025,193 in August 2019), the rebound has now seen them rise to a new high of $1,057,556 in February. This has come on the back of increased buyer confidence, rising sales activity, falling listings, and falling days to sell.  In short, more buyers are competing for a smaller pool of available properties for sale which is creating a sense of urgency and supporting upwards pressure on prices.

Annual % change in suburb median values
Annual % change in suburb median values (Source: CoreLogic)

As the first chart shows, the previous falls in values were largely concentrated in Auckland City and the North Shore, with more gentle declines in Rodney, Manukau, and Waitakere. The flipside is that Auckland City and the North Shore have now recovered the fastest – this can be seen in the second chart (i.e. the suburb map), with plenty of red shading through the central city and to the north. That said, there are still parts of Auckland where values are lower than a year ago (blue shading), and these tend to be pricier suburbs – such as Parnell, Mission Bay, St Heliers, Campbells Bay, and Takapuna.

Listings as % of existing properties
Listings as % of existing properties (Source: CoreLogic)

The CoreLogic Suburb Scorecard can help us shed more light on these patterns across Auckland’s suburbs. For example, we know that the previous overhang of available listings has diminished across Auckland as a whole, as sales activity has picked up and would-be sellers have been reluctant to add new listings to the market – perhaps fearing they won’t be able to find their ideal next property. The orange bars on the third chart show parts of the city where listings are lowest in relation to the number of existing properties* (e.g. Otara has only had about 2.3% of its stock on the market at any point in the past year), and all of these suburbs have seen a decline in the listings rate compared to the previous year (blue bars).

Median days to sell over previous year
Median days to sell over previous year (Source: CoreLogic)

Meanwhile, days to sell has generally declined across Auckland too. The fourth chart shows the fastest-moving suburbs in the year to January 2020 (orange bars), with areas such as Glen Eden, Otahuhu, and Northpark all seeing property sell in less than 21 days (median). Apart from Wiri, the suburbs in the fourth chart have all become faster-selling compared to a year ago, especially Laingholm. Given tighter listings and/or falling days to sell, it’s no surprise that many of these suburbs have seen values rise solidly – Otara is up 6.5% over the past year, Northpark 3.8%, and Glen Eden just short of 3%.

Overall, the general momentum across Auckland looks set to continue to push up prices for the foreseeable future. However, the mini-downturn over 2018-19 did little (if anything) to improve housing affordability, while at the same time, there is a large amount of new supply coming onto the market now and over the next year or two. For these reasons, it looks unlikely that this upswing in the Auckland property market will be as big or as long-lasting as previous episodes.

* Minimum 500 existing dwellings