It may be spring, but it feels like summer if you are watching the property market, as record levels of activity in the market are already hitting summer peaks. Here’s what you need to know: The First Weeks of Spring Already Hitting Peak Summer Levels It looks like summer has arrived early for the real estate market this year with the number of residential properties being auctioned already running close to the peak levels of last summer.

313 residential properties were offered up at auctions around the country in the last week of September, which is up 41% compared to the 222 auctions monitored the previous week (7-13 September), and up by 79% compared to the equivalent week of last year.

But just as tellingly, the number of auctions monitored last week was more than in the week of 18-24 November last year, which was in the middle of the pre-Christmas summer selling season. It was also getting close to the 363 monitored at the peak of last summer’s selling season (2-8 March 2020) before the country went into the Level 4 pandemic lockdown.

And it’s not just the number of properties up for sale that’s worth noting, sales levels and prices have also continued to see unprecedented success.

Sales were achieved on 222 of the 313 properties at last week’s auctions, giving an overall sales rate of 71%, almost unchanged from 72% the previous week and well up from the 51% sales rate in the equivalent week of last year.

When comparing the selling prices of the properties sold at the auctions monitored with their corresponding rating valuations, 88% sold for more than their rating valuations, compared with 86% over the first two weeks of September and 67% in the equivalent week of last year.

It will be interesting to see if this trend continues and what it could mean for the future of the market as we head into the more active months of Summer.

Mortgage Lending Running Hot as First Time Buyers Benefit

The latest Reserve Bank residential mortgage lending by borrower type figures show that nearly $6.8 billion was advanced in mortgages in August, which follows a record for a July of nearly $6.6 billion the month before.

The $6.8 billion borrowed in August 2020 was up some 26% on the figure for the same month a year ago (nearly $5.4 billion), and easily surpassed the previous record August tally, which was $6.1 billion in August 2016.

First home buyers were again strong in the market last month, exactly matching their record borrowing level of $1.344 billion borrowed in July 2020. The July FHB total was also a record in terms of its proportion of the total – at 20.4%.

It seems that this due in part to first home buyers benefitting significantly from the sharp fall in mortgage interest rates since the COVID lockdown in March, and particularly in Auckland, as the drop in interest rates has had a bigger impact on mortgage payments than it has on house prices at the bottom end of the market.

In March the average of the two-year fixed mortgage rates offered by the main banks for buyers with a minimum 20% deposit was 3.31% and by August that had fallen to 2.72%.

With this seeming like an upward trend, and we aren’t even in the high performing months of summer, it could be seen that all-time records could be broken in the coming months.

-by Ravi Mehta from Professional Financial Solutions