Barfoot & Thompson June Market Update
We spoke with Peter Thompson from Barfoot & Thompson to get his insights into the residential property market in Alert Level 1. Thompson observed that recently the company has seen an uptick in buyer enquiries from expat New Zealanders. This increased interest has come in the form of both direct contact with salespeople and through traffic to our website. The indications are that many are considering heading back to New Zealand when travel is again permitted across borders.
House Prices Show Resilience In Post COVID Trading
With regard to the recent pandemic, it was hard to make market predictions with much credibility, as there was no previous period of time that would compare. As we move into Level 1 and restrictions related to COVID-19 are eliminated, recent activity can give us some insight.
In the first full month of trading, permitted post the easing of COVID restrictions, Auckland house prices showed minimal change to pre-COVID prices. In fact, prices were resilient to change. The average price at $947,707 was down only 1.6 percent on that for April and 2 percent higher than for the same month last year.What did change significantly was the number of homes sold. In May we sold 396 homes, about half the number we sold in the same month last year and around three quarters of those we sold last month. The number of new listings for the month was 1,097. While down 7.5 percent on those for May last year, it is a number that does not support the view that investors will abandon the housing market in large numbers in the post-COVID era.
Overall, the Auckland market’s initial reaction to the COVID interruption has been uneventful. However, it will be another month before the market settles down and for a firmer indication of the future trading pattern to emerge.
Buying off the plans should not be overlooked by those living overseas
When considering buying property while overseas, you should not overlook the option of buying off the plans. Not only would you get a brand new property built to the latest building codes, but the price is fixed at the time of purchase. You also get the opportunity to buy into an exciting new development or precinct. Tenants love new builds, so buying off the plans is a great investment choice too.
However, not all developments are created equal and the array of options on the market is critically important when considering an apartment. Think about how close you are to local amenities, cafes, shops and education providers. A good example of this is the Wynyard Quarter which is an exciting suburb close to all of the action and the CBD. This is especially true since the recent opening of the NZ$1billion retail precinct of Commercial Bay, just a short walk away.
The latest release of 30 Madden Beaumont apartments by New Zealand property development and investment company, Willis Bond, has just started construction. The success of phase one where almost 100% were sold makes it a great case study that proves people are finding apartment-living in this precinct a great option. Investors, empty nesters, young families and professionals are now calling apartments home.
At a glance, these are the boxes you need to tick before you put down a deposit when considering buying off plan:
- The size, quality, location, views and carparks.
- Experience and track record of the developer.
- Who is the main building contractor and what experience in apartment construction do they have.
- Make a list of must haves. The larger the apartment in more desirable locations, the higher the price. Carparks are usually an additional cost.
- The quality of fixtures/fittings, wardrobes, floor finishes, balconies, parking and communal spaces.
- Make sure sound-proofing meets the minimum standards for New Zealand (has to meet the building code).
- Double-check the actual square metreage you will have to utilise. Remember this will include ‘waste space’ such as hallways and cupboards.
- Consider light sources. Will there be plenty of natural light? What about the sun?
- Think about your views now and in the future. Obviously the price will increase as the view gets better. Will your apartment be blocked by a future development?
- Thoroughly investigate the body corporate; check that the annual fees are realistic and will cover expected maintenance.
- Get good independent legal advice. Make sure there is a solicitor’s approval clause in the contract, and if not, ask for it to be included.
- Ask about security features.