OPINION: Some are suggesting that the excessive variety of properties on the market in Auckland is a positive signal that market turnover is ‘beneath strain’ or ‘sluggish’ and has ‘but to get better’ momentum.
Whereas I conform to the interpretation that the extent of properties on the market is contributing to maintaining a examine on costs, by way of the variety of gross sales being made, the market is the truth is doing very properly.
For many of this yr, Barfoot & Thompson’s inventory of properties on the market on the finish of every month has been round 6000*, the very best it has been since 2008, and considerably larger than throughout the 13-year interval 2010 to 2023, when the month-to-month quantity ranged between 3000 and 4000 properties.
However countering that is the variety of properties we’re promoting.
This yr we’re promoting on common 900 properties a month, our highest quantity for 3 years. Primarily based on the month-to-month common, this yr our gross sales are 7% larger than they had been in 2024 and 26% larger than in 2023.
So, what’s inflicting this imbalance between excessive gross sales and excessive variety of properties on the market at month finish? For me, the reply lies within the surge in new builds progressively reaching the market.
For a few years we had been instructed the Auckland market was some 20,000 to 30,000 properties in need of assembly its inhabitants’s wants, and this was artificially inflating the worth at which properties offered.
Regulators and builders have been continuously engaged on methods and technique of rectifying this scarcity and ultimately, the hole seems to have narrowed. Auckland is now reaching the purpose the place the provision is such that the variety of properties on the market on the finish of every month has practically doubled.
Excellent news for these available in the market for a house, however not so good for these trying to promote.
Whereas 6000 properties on the market on the finish of any given month could sound lots when in comparison with the final 20 years, delving into our information it reveals the norm throughout the Nineteen Nineties was between 5000 and 7000. If this quantity returns to being the norm will probably be welcomed by consumers.
Whereas gross sales numbers are on the rise, based mostly on gross sales worth information for Auckland over the previous six months, costs are exhibiting little motion. It’s a conclusion I view with a level of warning.
Of the brand new builds approaching to the Auckland market a big quantity are competitively priced at beneath $1million, and these gross sales might be having a dampening impact on the ‘common’ and ‘median’ costs being reported.
For instance, in 2022, 40% of all of the properties we offered had been for beneath $1 million. In 2024 this elevated to 52% and in 2025 year-to-date the extent is 54%.
Falling costs alone wouldn’t produce this stage of share change within the beneath $1 million market. There are merely extra decrease costs homes on the market now than there was for a few years, and these are interesting to first time consumers in addition to present owners trying to downsize, modernise or relocate.
What is obvious is Auckland goes by means of a type of durations of generational change in how folks wish to dwell their lives.
Most likely, the very best profile instance of that is the dramatic change from ‘in workplace work’ to a mix of ‘dwelling and workplace work’.
An analogous sort of change is happening round how folks wish to dwell. The retired technology is discovering village dwelling engaging, many youthful {couples} are preferring the pliability of renting fairly than locking themselves into lifelong mortgages whereas others are questing the extent of non-public wealth tied up in a house, and are in search of smaller, more cost effective alternate options. All are contributing to the rising development in the direction of condominium and city home dwelling.
Auckland nonetheless retains its pull as a spot to work, dwell and play – it’s simply its individuals are readjusting their housing preferences. Â
In a market going by means of such a state of change, astute distributors are those that worth their property ‘on the present market worth’ when itemizing. They’re the distributors promoting, whereas those that inflate their asking worth within the hope that in time the market will finally rise to satisfy them run the danger of lacking out as extra properties enter the market on the larger promoting level.
 *All numbers are based mostly on Barfoot & Thompson gross sales information.
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