Subdued signs of life

Pick up in Auckland sales activity and prices seen in new Barfoot & Thompson data indicates that it’s not all doom and gloom for the Super City market.

Tuesday, September 5th 2017, 11:30AM

by Miriam Bell

Barfoot & Thompson managing director Peter Thompson

Sales activity crept up in August, with 777 sales as compared to 747 in July, the Barfoot & Thompson data shows.

While that is a 4.4% increase, sales were still down by 22.5% on August 2016.

Likewise, both the average sales price of $918,926 and the median price of $820,000 were up on those for July, but both were down on their respective averages for the previous three months.

The median price was down by 3.5% year-on-year, but the average price was up by 1.4% on that of August 2016.

Barfoot & Thompson managing director Peter Thompson said that for the past six months there have been only minor variations in the pattern of lower sales numbers and prices remaining firm.

“The reality of the situation is that prices are remaining stable, and sales numbers are running at two thirds of where they were 12 months ago.”

That means that realism is the sentiment now dominating Auckland housing activity, he said.

“Buyers and sellers who accept that reality and are prepared to buy or sell at market are the ones achieving the outcomes they are seeking.

“Those who are looking to get a bargain, or selling at way above market, are missing out.”

Thompson said that the current market is having only a modest impact on the top and lower ends of the market.

“In spite of claims that there are few homes for sale in Auckland at under $500,000, in August we sold 90 properties in this price category, representing 11.6% of all sales for the month.

“At the same time, high-end properties continued to sell well with 276 sales, or 35.5% of all sales, being for in excess of $1 million.”

There was no shortage of new property reaching the market, with 1260 new listings in August and, at month’s end, Barfoot & Thompson had 3993 properties on their books.

Thompson said this provides a good platform for the market to operate from once the election, and accompanying uncertainty, is over.

“With a well performing economy, relatively low mortgage interest rates and strong population growth, there is every reason to anticipate over the medium term the housing market will retain people’s confidence.”

For ASB economist Kim Mundy, Auckland’s housing market showed subdued signs of life in August – although the market remains much cooler than this time last year.

It appears the prolonged period of slower sales activity is starting to impact would-be sellers’ decisions more noticeably, she said.

“Further, the impending election is likely to also be encouraging people to hold off listing their properties.

“In doing so, a degree of tightness appears to be creeping back into the market - but it remains too soon to tell whether this trend will continue.”

Once the election is over, ASB expects the imbalance between sluggish housing construction and high population growth will keep a floor under Auckland house prices, Mundy said.

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