Exclusive: New OneRoof Data Shows How Today’s Real Estate Market Stacks Up Against Boom Years

Record sales prices are set every month and the competition at auctions is fierce, but how hot is Auckland’s property market?

Exclusive data reveals that while many real estate agents are calling Auckland’s property market “crazier” than the boom years of the 2016 era, price increases are not all that hot.

Between August and October this year, home prices rose 2.8 percent from $ 880,000 to $ 905,000, data from analysts OneRoof-Valocity showed.

Although impressive, it was still below phenomenal price jumps in the same three-month periods in 2015 and 2016.

In 2015, home prices rose 3.6% from $ 695,000 in August of that year to $ 720,000 in October.

Prices raced even faster in 2016, jumping 5.1 percent from $ 790,000 in August of that year to $ 830,000 in October.

And while this year’s booming Auckland property market might not be as hot as it was in 2016, many experts are surprised that prices rose as most expected them to be hit by the economic fallout from Covid-19.

“I thought that house prices would fall on average 5 to 10 percent because we have no experience of a global pandemic,” economist Tony Alexander told OneRoof Property Report today.

Instead, it was now impossible to “put a number” on how high prices would rise, he said.

The biggest driver of the price increases was historically low interest rates, which make it cheaper to borrow money for home loans, he said.

Other factors included “fear of getting lost” among buyers and the likelihood that many people would redirect some of the money they would otherwise spend on trips abroad to homes.

ASB Chief Economist Nick Tuffley said many people felt more confident in their financial security as more extreme fears about job security had faded and the country had gone through its initial Covid-19 lockdowns.

The housing shortage also plays a role in keeping prices high, he said.

And those powerful forces were having an even bigger effect on domestic house prices than Auckland’s, according to OneRoof-Valocity data.

Between August and October this year, domestic prices rose 2.3 percent from $ 665,000 to $ 680,000 last month, the data showed.

That was before the boom years when there was a 2.2% increase in domestic prices from August to October in 2015 and a 2% jump during the same months of 2016.

Tuffley said the word “boom” was not out of place to describe today’s market.

“We are experiencing a little boom, in the sense that we are making people respond to interest rates as they normally do,” he said.

However, not everyone is willing to use the word boom.

Lesley Harris of the First Home Buyers Club said she wouldn’t call the current market that way.

“I think there are some extraordinary and isolated sales, but I would like that to be repeated month after month before saying that it is a boom.”

Liz Kendall, senior economist at ANZ, also warned that there could still be “headwinds” capable of slowing the fast-paced market, such as less migration and new economic challenges from Covid-19.

“I’m a bit surprised that there isn’t a little more caution in terms of willingness to pay, given the great uncertainty from an economic perspective.”