Auckland house sales have fallen by almost $20 billion over the past year as prices have taken their fastest dive since the Global Financial Crisis a decade ago.
New data shows $26.4b worth of house sales were completed in the 12 months through to the start of November. That’s 43 percent less than the $46.3b worth of sales made over the same 12-month period a year earlier when the market was booming, data from analysts Valocity showed.
Amid the declining market, however, the new southeastern mega-suburb Flat Bush has been among the city’s best-performing areas. It has had 371 homes sell for a total value of $445 million over the last six months - making it the suburb with the second-biggest total value of sales, behind only Remuera.
Harcourts Flat Bush Co-owner Brandon Hoverd said the suburb is popular with families wanting bigger houses. And these types of buyers have continued buying through the downturn in greater numbers than other groups, such as investors, as they look to capitalise on falling prices. The area has continued to sell fairly well in a declining market because of the opportunity,” Hoverd said.
“We’re selling properties for $1.7m that we would have gotten $2m for last year.” Flat Bush’s relatively steady sales during the market downturn are part of a growing shift in Auckland’s centre of gravity to the south.
Four out of five of the city’s biggest-selling suburbs over the past six months – Remuera ($493m), Flat Bush ($445m), Papatoetoe ($281m), Papakura ($277m) and Pukekohe ($272m) – are in the south. Yet just five years ago in 2017, Flat Bush was the only southern suburb in that year’s top five biggest-selling suburbs – Remuera ($1.079b), Auckland Central ($914m), Flat Bush ($647m), Hobsonville ($454m) and Epsom ($442m).
Similarly, Flat Bush has been closing the gap on the inner Auckland suburb Remuera as the city’s most valuable suburb. In 2017, Flat Bush’s $647m worth of sales over the 12-month period was just 60 percent of the $1.079b worth of sales made in Remuera that year. However, Flat Bush’s $445m over the last six months is now just 10 percent less than the $493m worth of sales made in Remuera. Yet the new figures come against a backdrop of plummeting sales.
Senior Economist Kelvin Davidson with analysts CoreLogic said the New Zealand housing market’s downturn has deepened over the past three months. He said the number of sales being completed was at its lowest level in a decade, while the speed at which average property prices were falling was rivalling or “even getting a bit worse” than those experienced during the GFC. In Auckland, the average house price had now fallen to $1.4m - or 5.5 percent lower than they were at the same time last year, according to the OneRoof-Valocity House Value Index. James Wilson, Head of valuations at Valocity, recently said that, while more houses had come up for sale with the start of spring, there was already an oversupply.
That meant the average number of days it took homes to sell was continuing to rise, he said. “As interest rates and the cost of living continue to rise and lenders apply higher test rates as part of the mortgage application process, borrowers’ purchasing power continues to reduce,” he said.
