Auckland activity not off starting blocks yet

We haven't yet fully emerged from the holiday season so it's still hard to get a read on the trajectory of the property market. But let's look at what we can see so far.

First, remember how we finished up 2015. Sales volumes were very strong in the areas surrounding Auckland.

Hamilton was particularly strong, and not too far below the sales turnover we saw in the previous boom during 2000 and 2010. Sales activity in Auckland did fade away at the end of the year in response to various rule changes and lending restrictions, as well as a notable decline in foreign buyer activity.

Values in Auckland went right off the boil also.

The QV house price index showed values flattened in December, while some of our own data is now showing month on month values dropping across most of Auckland.

Meanwhile, price increases continued in the areas surrounding Auckland as people and money flowed out of the supercity. Values also picked up further south, especially in Wellington, although the effect of Aucklanders there isn't as strong.

Early indications are that these late 2015 activity trends haven't changed at the start of 2016. There still appears to be the most market activity in the areas surrounding Auckland.

At this time of year we usually see listings increase again after Christmas as sellers prepare for the traditionally busiest buying time of the year.

Compared with the same time last year the number of new listings is down about 10 per cent in Northland and Auckland.

This backs anecdotal evidence that some Auckland real estate franchises had very little in their pipeline of potential listings at the end of last year. Meanwhile new listings are up 20 per cent to 50 per cent across most of the rest of the North Island.

Despite this increase in new listings the total number of properties for sale is down 10 per cent to 40 per cent across most parts of the country. The number of new listings just hasn't kept pace with the number of properties selling.

So the choice for buyers is very tight, which will tend to put upward pressure on prices.

Our expectations remain that activity and values in Auckland will ease a little for a few months then pick up again as low interest rates, high migration and a housing shortage ultimately press upwards again.

But affordability, rental yields, expected capital gains and local market confidence will see the top half of the North Island remain strong.