A new report has shown the number of new houses being built in the city has increased substantially in the past two years and will only continue to grow in the coming years. The Local Auction rooms are heating up as we head to the peak of the summer selling season.
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New Homes Builds Continue to Rise
According to a new report, Auckland can expect to see the number of new homes being built continue to increase for the next one to two years. This comes as more than 13,000 new homes were added to Auckland’s housing stock last year.
Auckland Council issued 13,197 Code Compliance Certificates for new dwellings in 2019, up 24% compared to 2018 and up 63% compared to 2017. As the number of new dwelling consents being issued is still rising and it generally takes up to two years for a dwelling to be completed after a consent is issued, it is expected that the number of new homes being built in the city will continue to rise at a steady pace.
Code Compliance Certificates are issued when the building work carried out complies with the issued building consent, and in the past four years, the number of new homes being completed in Auckland each year has more than doubled.
That suggests the number of new homes being completed in Auckland could hit around 15,000 a year some time in 2022, which would be an increase of 14% compared to the number completed last year. But the figures also suggest that while the number of new homes being completed is still rising, the rate of growth is slowing, so it could be possible that in two-year period we could see these numbers flatten.
Auction Activity Continues to Soar in February
It seems that the peak summer selling season is in full force after the holidays as Auckland’s largest agency, Barfoot & Thompson had an increase in auction activity in the first week of February, an improvement at the same time last year.
The agency marketed 62 residential properties for sale by auction in the first week of the month, which was up from 55 in the comparable week of last year.
The sales rate was also higher this year, with 55% of the properties changing hands at last week’s auctions compared to 40% in the same week last year.
This has followed a three-month trend of successful Auction Activity, especially in December which had increased activity for a traditionally quiet month, giving some indication that a successful summer selling season could be on the horizon.
Prices also appeared reasonably firm with 76% of sales achieving prices that were higher than their rating valuations, where selling prices and valuations could be matched.
Many will be watching to see how the rest of the month plays out as we head to the peak of summer, with many suggesting this heightened activity has come from people who were sitting on the fence waiting to see if mortgage prices would fall further. These property investors may be finally making moves after the Reserve Bank left the OCR rate unchanged at the end of last year.
-Ravi Mehta
