While residential properties are generally realising optimal sale prices after minimal days on market, the residential sector is dampened by a paucity of stock homes coming to market. Even with the average sale price of an Auckland home slated to hit one million in the coming week, prospective vendors are hesitant in listing knowing they are buying in the same super-heated market. In some parts of Auckland properties are appreciating up to $5,000 per week putting undue pressure on vendors to buy quickly.   Multiple offers on a property is now the expected norm with more and more properties selling ‘off the plans.’

Demand grossly exceeds supply and this imbalance will not equalise until more land is unlocked or re-zoned for development and more dwellings constructed. While the AUP seeks to address these issues, immediate and tangible relief is still some time off. Some developers are shying away from building the ‘affordable housing’ designated under the AUP preferring the more lucrative returns from big ticket properties. Developers are also expressing concern over increasing construction costs, difficulty in sourcing developable land and difficulty in finding construction companies available to start projects.

Effects of the new LVR criteria (namely the 40% deposit requirement) are to a small extent being ameliorated as investors collaborate finances but overall the LVR criteria is perceived to be discouraging activity. Some prospective buyers report being discouraged from acquiring property as they perceive the 40% LVR will limit the buyer pool and reduce competition with negative implications for sale price.

In short, the market is as interesting and volatile as ever which only increases the requirement to engage expert services regardless of where you are located or your activity in the market spectrum.