Record numbers of real estate agents view the current house market as a "sellers" market, according to the latest BNZ-REINZ residential market survey.
BNZ chief economist Tony Alexander said a record net 24% of the agents responding to the survey felt that buyers were currently more motivated than sellers to do a house deal.
In addition, a "strong" net 46% of agents felt that prices were rising. In Auckland a net 71% of agents saw prices as rising, Alexander said.
Latest REINZ figures out this week for June showed an increase in national median house prices, while annual price inflation in the super-hot Auckland market is now running at nearly 20%.
The market strength is coming on the back of a chronic shortage of houses listed for sale.
Auckland's biggest real estate firm Barfoot & Thompson last week reported its house listings were at an all-time low, while Realestate.co.nz reported the national housing inventory was at historic lows.
"As we observed last month, the listings shortage appears set to get much worse," Alexander said.
A net 19% of agents responding to the latest survey (same result as last month) reported that they were receiving fewer requests for appraisals from potential sellers of houses.
"This measure has been negative for three months now and sits at a record low," Alexander said.
"The range on offer for buyers to choose from looks like getting smaller - hence the continuing upward pressure on prices."
For the first time the survey this month included a question on whether agents from outside Auckland were now seeing people from Auckland looking to buy in their region.
Obviously, if this were the case it would indicate that Aucklanders are looking elsewhere to find affordable housing.
Alexander said that a "strong" net 42% of agents reported that Aucklanders were looking in their regions.
"Thus the rising market in Auckland may be starting to have impacts elsewhere - though we lack a time-series as yet to allow us to gauge the true strength of this result," he said.
5 Comments
Yep. Auckland property is a real winner.
Feast your eyeballs on the photo, and tell me that piece of crap is worth 2.1m.
Then read the rest of the the article. Poor old Ms Young Xin Chen , my heart bleeds.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10897573
Maybe there is Sum Ting Wong.
http://www.stuff.co.nz/world/americas/8916988/News-show-falls-for-racis…
Interesting conundrum
If you don't own the land, then the house is only worth it's replacement value plus any intrinsic value of the location minus the intrinsic "leasehold" devaluation cost and minus the value of any dilapidated repairs. At $70,000 per annum the ground rent overwhelms any intrinsic value of the very "desirable" and very "valuable" location. At best the present day value of the property to a potential buyer is about $400,000
The council renovated the place and marketed it without success. Didn't sell.
How do they arrive at a value of $2,100,000 ?
A valuable lesson. Usually you only hear about the success stories, rarely the failures.
There is a moral and a warning in this story
The Cornwall Park Trust Board has placed a present-day-value of a future stream of income at $70,000 per annum which is equivalent to 70% of a good income, just to rent the land. That rent has jumped from $8000 pa to $70,000 pa in one hit, which is equivalent to todays "moral hazard" faced by anyone buying a property on a 95% LVR mortgage and an associated risk of mortgage interest rates rising in the very near future.
That's why RBNZ and Banks and Govt are all in a state of terror about global interest rates
This lady has walked away having lost her shirt. It's all gone
She must have bought it just before the 21 year lease expired.
Now that it has been in the news, be interesting to see what happens to this place going forward. It's nothing more than a 70k/annum liability, until you can get somebody else to assume it. One of those situations where it owns you.
Edit: In this position where she has nothing left to lose, I suppose she could always defray her costs and send an up yours message to the Trust by selling what she owns; the house. I know of house removal crews who would pay quite a pretty penny for it, take it away one night leaving an ugly hole and trail of dirt leading all the way back to Manawatu or somewhere. That would collapse the overall value of their asset.
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