Strong close to 2019 market lays strong foundations for 2020

New data in from December shows the market continued its slow recovery that started in spring with a slight rise in house values and four-year record sales for Auckland largest real estate agency.

Here’s what you need to know:

Property Market Closes 2019 Strong

It seems the that property market was not going to close out 2019 on a whimper, as the traditionally quiet month of December saw the market continue to grow on the small upward trend that started in spring. This is according to QV's property index, house values rose 0.9 per cent in December, and 4 per cent during the year, thanks to a strong pick up since September, particularly in Auckland. It seems the recovery in Auckland is the main driving force in this nationwide pick up, and according to CoreLogic's head of research Nick Goodall, low unemployment, low interest rates and a continuing lack of houses are key driving factors. "First home buyers remain active, and there has been a re-emergence of property investors, as their confidence in the market returns, however, in some smaller areas the perception of value is starting to wane." The data showed that for the month of December property values in Auckland were now just 0.1 per cent below where they were a year ago, with the average property costing $1.047 million. Overall national figures show the property market had risen 2.7 per cent in December quarter alone, the strongest since November 2016. It’ll be interesting to see what moves the Reserve bank makes in the coming months, and into summer – a traditionally healthy period for the property market.

Auckland Largest Agency hits Four-Year Sales High

Barfoot & Thompson, hit a four year sales high in December, selling 779 properties - the most since 2015 when it sold 796 properties. According to managing director Peter Thompson, December was a surprising month for the agency with the four year record high, but meant there were less properties at the end of the month, "The strong December performance has left the market extremely short of stock and at month-end we had only 3191 properties on our books, the lowest number in any month for more than four years. Properties for sale were 13.8 per cent lower than in the previous month and limited stock is holding back sales activity." Thompson stated that higher sales figures was a good start to summer and predicted that it could be strong for sales and may continue the trend well into autumn.

Strong Predictions for 2020 property market

Economists from Westpac bank forecast Auckland house prices to now rise by 5 per cent in 2020 and national prices to grow even more. "The housing market has indeed turned," Westpac chief economist Dominick Stephens said. "Annual house price inflation has already reached 5.6 per cent, and it now looks as though it will reach 7 per cent by April 2020 at the latest – there is a chance that it could touch 7 per cent even earlier than that." With extremely low home loan interest rates, continued migration into the country, low unemployment and a strong economy, the predictions of the property market going up is inevitable.

-Ravi Mehta, from Professional Finance Solutions