The median price of homes sold by Barfoot & Thompson was $850,000 in August, a new record high and up $10,000 compared to July and up $95,000 compared to August last year.
The average prices of home sold by the agency was $906,560 compared to $867,681 in July and $821,079 in August last year (see chart below).
However Barfoot & Thompson Managing Director Peter Thompson said the rate at which prices were increasing was continuing to slow.
"August's price increase was restrained, for both the average and the median price," he said.
August's average price was up just 2.6% compared to the average over the previous three months, he said.
"Our data shows that those claiming the average price is on the verge of topping $1 million are over-inflating where prices are heading.
"While prices continue to rise, for the past five months buyers have not been prepared to pay more than than they believe is the market price.
"The same trend can be seen with the median price, which at $850,000 for August is up just 1.2% on July and up 2.5% for the previous three months.
"Current price increases are relatively modest compared with what has occurred in recent years.
"The slowdown can also be seen when comparing August's sales numbers, listings at month's end and new listings, with the average for these statistics for the previous three months.
"Sales numbers were down 9.2%, available properties up 6%, and new listings remained at the same level.
"It has led to a small increase in the choice available for buyers.
"It all adds up to some heat coming out of the market.
"The continued rise in prices with lower sales indicates that new regulations requiring investors to have greater equity than previously, which the trading banks enforced at the start of August, has had a limited impact on prices but may have affected sales numbers."
Thompson said the agency had a total of 3151 of homes listed for sale at the end of August which was the highest it had been for five months and up 6.6% compared to the end of August last year.
"The real test of where prices are heading will come this month with the arrival of spring," he said.
In an ASB Quickview newsletter on Barfoot's results, ASB economist Kim Mundy said it appeared some people could be rushing to list their homes for sale ahead of new LVR restrictions which are due to implemented next month.
"While sales activity held up in August, it was far from a strong month and may be the result of banks already acting in the spirit of the new restrictions, therefore limiting investor activity in the market," she said.
Mundy said the number of homes available for sale in Auckland was up, a trend that was also being reflected in data form other organisations.
"However total inventory levels remain near record lows and the market still has a long way to go before demand and supply are back in line," she said.
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38 Comments
"Our data shows that those claiming the average price is on the verge of topping $1 million are over-inflating where prices are heading.
Hmmmm...
In this context, the following statement last week by Federal Reserve Vice-Chairman Stanley Fischer (Bloomberg) displayed a strikingly narrow understanding of the investment process:
“Well, clearly there are different responses to negative rates. If you’re a saver, they’re very difficult to deal with and to accept, although typically they go along with quite decent equity prices. But we consider all that and we have to make trade-offs in economics all the time, and the idea is the lower the interest rate, the better it is for investors.”
The Fed has insisted on slamming its foot on the gas pedal, refusing to recognize that the transmission is shot. So instead, the fuel is instead just spilling around us all, waiting for the inevitable match to strike. We can clearly establish that activist monetary policy - deviations from measured and statistically-defined responses to output, employment and inflation - have had no economically meaningful effect, other than producing a repeated spectacle of Fed-induced, speculative yield-seeking bubbles. The American public has repeatedly paid the consequences of the Federal Reserve’s insular dogma when those bubbles have inevitably collapsed, but those consequences are typically spread over a longer horizon than the Fed appears to consider. Read more
I guess the dynamics are not much different in respect of an RBNZ fueled residential property bubble?
All this money raining down from the sky without consequence.
How long does it take your median Aucklander to save this months $10,000 kick in the guts. How many years of savings is $95,000 for the median wage slave. Three, four, five?
I can't figure out what is more frightening. What happens when something gives. Or what happens if something doesn't.
I agree with you. He sounds like he is in serious damage control mode. If he came out with the opposite rhetoric and said that the market was strong he knows he is helping to build a case for such things as more restrictions on investors and tax on foreign buyers. He does not want anything more implemented that will help slow down sales. It is all about volume of sales for him. More sales more commission income. In reality Auckland is still very strong and anyone in a position to buy now should buy as price growth has a long way to run yet.
In reality Auckland is still very strong and anyone in a position to buy now should buy as price growth has a long way to run yet.
gordon...Are u serious about what u say..?? What has made u change your view..?? End of last yr u were calling for a bust and now you are expecting strong growth..?? ( serious question ... i'm not being disingenuous ).
Well seen as you have a country of a billion people with millions of them cashed up looking for property here, meanwhile Canada doing the sensible thing and trying to reduce that demand, and a NZ government with a steely determination to make sure nothing stops this happening.
What else could happen?
Did John Key just admit in a recent radio interview that Auckland average house prices had now met the 1 million mark.
And if Kiwi investors are no longer buying in Auckland with all the LVR banking restrictions and certainly citizens and most immigrants can't afford to buy - then the question is who is buying in Auckland and continuing to push up house prices?
Barfoots are in a good position to catch those foreign gains.
https://www.barfoot.co.nz/news/2015/may/top-salespeople-2015
I just saw this house up for sale again, Only got sold in march,
flipping for GC still going strong, they want mid 6$ so around 100 k profit
http://nz.ksouhouse.com/p.php?q=Mangere, Manukau+City, Auckland&id=265822
I'm getting more and more confused by the day. I still have family members and close friends saying 'get in now' 'get in NOW NOW NOW!' Then I had John Key telling me I should buy an apartment but, then I have people telling me not to do that because of body corp leaky building etc. Real estate agents saying it's slowing down, do I wait? Others saying nope it's rocketing up so save, save what though, what's the figure I need per week now? $3000 per week (which I physically can't save) so do I go and retrain to be a doctor because I didn't make the right decisions in life to be able to own a HOME?!? (Home, a HOME). Finally, I have the majority saying I should leave Auckland, which I can't BUT reports of everywhere else rocketing up skywards. Sigh, I honestly don't have a clue what I'm doing. I think about this day in day out and I'm not sure just owning a home should be this difficult a decision. I know saving for the deposit is difficult I get that but to try and make sense of all of this and to try and make the right move for my future is becoming *insert swear word* impossible in this country. I'm not putting this comment here as fodder to be told I'm lazy and entitled, I've heard that all before. I get that it is completely awesome for most people, I get that. But, it's getting harder and harder to know whether even living in this country is possible for sort of medium earners. What do we do then? Where the h*ll are we going to go? Quite frankly, I started off sad, then angry, now I'm just broken-hearted over this. Let the attacks begin... I'll just hang my head and take it.
What to do depends entirely on individual circumstances. You only need 20% of the $3000 per week as a deposit. However I do not recommend buying in a bubble. There's nothing wrong with renting as it has a lot of upsides. People forget that and all the downsides that come with owning a home.
What is more important is having your finances in order. Have a budget, make sure you are saving some money. If you have debts (especially high interest) pay them off. Once you have a decent cash buffer to cope with spending emergencies then look at investments. You are better off getting dividends than owning a house with no associated income.
I know that the stock market is in a bubble as well but it will have some resilience as there are actual businesses behind them. However you may want to read The Four Pillars of Investing prior to getting into ETFs or shares. That book will at least teach you modern portfolio theory. So while your family and friends are saying to buy a house you can build your wealth without accumulating debt. Easier bar for entry than property.
Just my opinion but there is always a way forward. Being obsessed with housing and addicted to debt is not a good place to be.
Thanks. I appreciate it. And, you are right, I'm obsessed with the housing thing, mostly because in my circles I'm the last to even approach the property ladder (due to tragic events a few years ago) so by all accounts 'I'm too late' and it makes me feel like a failure. Understand a failure in terms of having a home, not investments btw.
I have no debt and I'm saving, as much as I can. It's all I can do at the moment. A buffer is good advice I'll factor it in. Thanks for understanding and I will pick up that book.
its a shame that like many kiwis you are fixated on only saving to buy a house. If you had made that saved money work for you could have been that little bit closer.
as already said the sharemarkets are in bubble but you could have with a bit of study and research and conservative investments grabbed some good GC over the last couple of years.
I would not risk it now as too many red flags
but here is a couple of examples of where if you had jumped a couple of years ago you could be so much closer
https://www.nzx.com/markets/NZSX/securities/THL?icharts=true
https://www.nzx.com/markets/NZSX/securities/AIA?icharts=true
Anyone telling you to buy now in Auckland is gambling with your money - they are either ignorant of the world of economic risk and probability, or just plain irresponsible. Every month we see gains like this increases the chance of a major move lower in future (don't ask me to define 'future', that's the hard bit). House prices may well continue to rise for some time - but it's a massive gamble for you to bet the house on it, which is essentially what you'd be doing if you bought now.
You haven't really been attacked in the past Hardworker and there is no reason to anticipate attacks now. Okay so it was me that postulated that different decisions could have been made and maybe I underestimated the power of past life events but I never intended it to be an attack just a response to things you had written about yourself. I realise now it wasn't very helpful.
That said I have been recently struggling with my own personal demon that many would consider to be rather strange as it is a kind of uber first world problem but nevertheless has given me a taste of the anxiety other people may be experiencing about the future. It is not a nice thing to endure. It has made me think that if we are on the precipice of an anxiety epidemic concerning our future security then a whole lot of largely silently endured human misery is about to take place. It's a very strange position for our people to be in and not one that is good for us psychologically as we like to think ahead and have some sense of certainty and safety or at least have a fighting chance. It is also a quite an unexpected turn of events.
Zach, perhaps not in the comments I haven't been attacked but I can assure you time and time again in real life face to face I have not so much been 'attacked' but I've definitely been ridiculed for being a renter. Im sure I'm not the only one. It's all a big joke to the people around me making massive capital gains. Discounting everything else, essentially it really really hurts.
Indeed. Their illusory capital gains are in fact precisely the amount of extra debt burden you must carry in order to ever aspire not to be renter scum. The numbers are now so large they have lost all meaning.
They say the pain of losing is three times more than the pleasure from received from gaining. The moving goalposts of the out of control neve rending Auckland property ponzi feels like being tortured by sadist.
Who would have believed not long ago that New Zealand would become the most hopeless place in the entire world to be starting out in life?
Any scum ridiculing the disenfranchised should be on the sharp end of some physical lashing out.
I almost threw my remote at the TV last night as Hosking waxed on about how some dude from S&P was in awe of NZ because of our performance since the GFC (I think that's what it was). In Hoskland, that means that everything is rosy, what are we all bitching about? Long live the Key government!
Meanwhile, on the ground floor, why do we think crime rates are up when employment is stable? There is huge damage being done to our society, if not our economy, by this housing mess. I really feel for people like hardworker - It seems like only the most intelligent of my friends are in the same boat, while the ignorant reap the rewards of their blind luck.
Luckily I still have friends like you and yours. For me, it has really really separated the people who I spend time with. I have started to avoid occasions where I'm likely to get more stick about still renting so people are noticed I no longer turn up to certain things. I can't have it in my life. It's hard enough at the moment without adding to the depression and failure I feel about being where I am at this stage in life.
Look at it this way - it's a good $#@% detector. I'm actually one of the lucky ones who got in and out of Auckland at the right time (starting with a small, high-yielding apartment, then upgrading to a modest house on the outskirts). I'm acutely aware that there was a lot of luck and timing involved and the same opportunities no longer exist. I was happy to get the hell out of Auckland while I was ahead and leave some on the table. I know how depressing it can be for people who haven't had the same good fortune, through no fault of their own, so I'm careful not to rub their noses in what happens to have gone well for me. If the people you spend time with are so callous that they can't understand this, I think you're right to be socialising elsewhere!
About time TVNZ took notice of the amount of people that are sick if that self important pompous git that Hosking is.
Is disgusting that someone so politically biased towards the government gets a prime time platform every night to spout his admiration for Key at every opportunity, if he doesn't make you sick then there's something wrong with you.
Statistics,.Barfoots new listings past 3 months are 53 percent higher than sales. Compared to last year the past 3 month period has seen sales slump 17 percent, in the past 2 months sales are down 25 percent for the comparable period. In the past three months , Barfoots has sold approximately 565 million dollars of woodchip less than the comparable period last year. Average prices peaked in June ,The past three months of RBNZ mortgage data confirms this was the peak.
Interesting editorial in the Herald just now about the tide possibly turning - it has certainly happened elsewhere in the world and we do tend to lag behind a bit here. Possible that it might merely come down to 'enough is enough' by the banks and the borrowers rather than major regulation or a catastrophic event....? Who knows...
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