Barfoot & Thompson managing director Peter Thompson
by Miriam Bell
Barfoot & Thompson managing director Peter Thompson
The agency’s sales numbers declined steeply to 778 in October – which was a quarter lower than sales numbers in September and also a quarter lower than the average for the past three months.
Barfoot & Thompson managing director Peter Thompson said the last time sales numbers fell this low in an October was in 2011.
That was at a time when the market had still not fully recovered from the Global Financial Crisis.
It is yet another sign the Auckland market is losing its forward momentum, he said.
In a reflection of this, at months end the agency had 3,711 properties listed, which was 21.3% higher than at the end of September and the highest number at month-end in three years.
Yet, at the same time, both the average sale price and the median sale price increased in October.
Auckland’s average sales price rose to $943,801, which was an increase of 2.6% on September, and 12.3% year-on-year.
The median sales price went up by 1.8% to $865,000 in September, but Thompson said its rate of growth has slowed.
“The average median price increase over the past 12 months now stands at 10.9% compared with 17.4% for the 2015 calendar year and 11.1% for 2014.”
Thompson said the combination of falling sales numbers, an increased amount of listings and rising prices was rare and hadn’t occurred for many years.
But he believes it is high end property sales which are lifting the sales prices, especially as 39.2% of October’s sales were for property in excess of $1 million.
High end buyers were not put off by prices if the property represented value for money, he said.
“Where buyer resistance to prices has been felt most is in the under $1 million price category. Greater choice has created an environment where buyers feel less pressure to pay the asking price.”
The new investor-focused LVRs have had a significant impact on sales in the under $500,000 price category, Thompson added.
“In spite of there being a reasonable selection of properties available only 40 homes, or 5.1% of all properties, sold for under $500,000 in October.”
While the data clearly illustrated the impact the LVRs are currently having on the market, economists continue to question how long that impact will last.
ASB economist Kim Mundy said the fall in sales was of similar magnitude to that seen after last year’s investor restrictions and tax changes and was in line with what was expected from the new LVRs.
Past LVRs have caused a temporary slow-down in house sales, which is what they are seeing again in this data, she said.
“However, it remains to be seen how long this round of LVRs will weigh on Auckland housing market activity.
“In the meantime, low inventory, high population growth and low interest rates will continue to support house prices.”
They expect housing activity to remain subdued for at least the remainder of this year as buyers and sellers take time to assess the impact of the latest LVRs on the market, Mundy said.
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