Barfoot and Thompson say prices, volumes down in July (Update 1)

Auckland's largest real estate group Barfoot & Thompson said its average sale price in July fell 2.8% from June to NZ$507,384 and that its sales volume fell 9.5% with 779 properties sold over the month. (Update 1 includes ASB comment.) "As is seasonal at this time of year, the average price edged down (from June)," Managing Director Peter Thompson said. "It was an anticipated easing, as the market often marks time for a period before the start of spring activity," Thompson said. "Overall, July activity can be seen as a month which emphasised that Auckland housing has found a new base. People are feeling comfortable with current prices and trends," he said. Sales volumes in July were their lowest since 559 in February, following a jump from 2008 lows in March, April, May and June. The July sale price was up NZ$10,000 from the same month last year, while sales volumes rose 24%.

"More sellers are entering the market and the 1386 properties we listed for sale in July were an increase of 16.6 percent on June, and an 18.4 percent increase on July last year," Thompson said. "Our new listings were the highest they have been in four months, and it is yet another sign that Auckland is shaking off constraints caused by uncertainty about the economy and future prices," he said. "The average rent achieved remained steady at $388 a week, while the number of properties let to tenants increased by 7.5 percent to 790, on a par with that achieved in the traditional peak month of January." "July is often a solid month for letting properties, but this is the first time we have let the same number of properties in July as we did in January." Here is ASB economist Jane Turner's take on the figures:

Barfoot and Thompson Auckland house sales (seasonally adjusted) remained reasonably steady in July, only falling 0.4% and up 23.8% on year-ago levels. This steady trend is consistent with mortgage approvals over July and suggests nationwide REINZ house sales will also remain firm. The housing market continues to hold onto its recent gains, although the level of turnover remains below average levels. New listings (seasonally adjusted) have picked up over the past few months, up 8.2% in July following an 11% increase in June. New listings have been very weak, due to the weak housing market discouraging potential sellers. In addition, falling permanent and long-term departures may have been suppressing supply. However, potential sellers are now being tempted back in now the housing market is improving. Despite the pick up in new listings, the total number of available listings continues to decline, and starting to settle around average levels restoring the balance between supply and demand. With the pick up in demand and the continued decline in excess supply, we anticipate that house prices are now likely to be stabilising. Median house sales prices month to month are not the best reflection of house prices, as they are affected by sales composition. QV house price index, due over this weekend, is a better gauge on house prices and is likely to show a smaller decline in house prices relative to year-ago levels.