High sales, low prices: Signs of oversupply in Auckland property market?

Thursday, 12 September 2019

Fletcher Living builds a house in Hobsonville Point in a single day.

High turnover rates and falling prices may be a sign that there are too many new houses going in to some parts of Auckland, commentators say.

Corelogic has produced data on the suburbs around the country with the highest turnover rate – measured as the number of sales as a percentage of total housing stock.

Kumeu was top of the list at 14.7 per cent. It was followed by Hobsonville, Pokeno, Whenuapai and Silverdale.

All of those areas also recorded a fall in prices over the year.

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Property developer David Whitburn said there was a small oversupply of apartments in Hobsonville Point, he said, which was gently pushing prices down.

Only sixth-rated Mangakino reported high turnover and a lift in prices, up 15 per cent.

Property developer David Whitburn said there was a 'bit of an oversupply' in some of the areas on the outskirts of Auckland.

Some of the sales being recorded were the final stages of large developments being finished, he said.

'Pokeno in particular, I do see an oversupply there and downward price pressure.'

He said, as developments got further away from city centres, people started to question the time it would add to their commute to work.

There was a small oversupply of apartments in Hobsonville Point, he said, which was gently pushing prices down.

Economist Shamubeel Eaqub agreed. He said greenfields developments were being opened up in many areas. 'We have had a lot of supply on the edges, although a lot of medium-density stuff is closer in.'

Corelogic economist Kelvin Davidson said some buyers might have concerns about the infrastructure available when purchasing a property in a place such as Pokeno, in Waikato.

'There's so much building going on and it relies on the motorway, there's no public transport.'

He said, if population growth slowed in Queenstown or Selwyn, those areas could experience a marked oversupply of property.

Auckland Council chief economist David Norman said there were a large number of houses being built but the price weakness reported was not necessarily a sign of oversupply.

Infometrics chief forecaster Gareth Kiernan said there was still a significant undersupply of housing in Auckland.

'You'd need to much more substantial price falls, particularly given the magnitude of price rises over the last decade, before you could start to think about the Auckland market being oversupplied.'