The number of homes sold by Auckland's largest real estate agency plummeted in February.
Barfoot & Thompson sold just 410 residential properties in February, which was less than the 431 it sold in the holiday affected month of January and down 45% compared to February last year.
That was the company's worst sales result for the month of February in at least 25 years.
However new listings and the total number of homes available for sale at the agency both went higher in February, leaving current stock levels at a 10 year high.
Barfoots received 1309 new listings in February, up from 920 in January and 1077 in February last year (+21.5%).
That pushed the total number of residential properties the agency had available for sale at the end of February to 4873, up 11% compared to February last year and the highest level of stock for the month of February in 10 years.
The agency's average selling price was $1,101,980 in February, down 1.2% compared to January and down 7.9% compared to February last year.
The median selling price of $1,023,000 was up 2.3% compared to January and down 8.9% compared to January last year.
Barfoot & Thompson Managing Director Peter Thompson said the disastrous weather events in Auckland over February had caused more disruption to the market than Covid.
"The state of emergency, constant gales, disruptions to movement and the public's preoccupation with safety made trading conditions during February the most challenging anyone in the business can recall," Thompson said.
"Whereas the Covid lockdown caused frustrations, in February onsite activity involved unprecedented commitment, discomfort and perseverance," he said.
However there was a ray of hope, with Thompson reporting that buyer interest and attendance at open homes had started to improve along with the weather.
And those buyers will have plenty to choose from as they take advantage of high stock levels in the early autumn sun.
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85 Comments
Wasn't someone saying on here yesterday, that B&T made the call, that if all 3 months of Jan, Feb & March 2023 were crap, then it's all over rover .....
"buyers will have plenty to choose from as they take advantage of high stock levels"
Indeed. And throw in the banks are hacking each other to pieces to gain/keep market share, and it's all looking good.
But will it to the RBNZ?
the saying "don't fight the fed" may also apply to the RB. I'm picking a lift in OCR target.
Last week, the US' Strategic Petroleum Reserves was down to less than 17 days' worth out of a gross capacity of 85 or so days. Biden is using wartime reserves to artificially lower CPI in the US (energy commodity inflation reported at 2.8% YoY in Feb), hoping the energy crisis will pass before reserves hit zero.
OMG thats the dumbest thing, remeber this thing called Pearl Harbour anyone......
They may well be offering deals but they will be very carefull who they are offering them too.......
hint they realy really want people with a lot of equity
Desperately competing for a very small pool of buyers who have amazing, steady incomes or Burt loads of equity - but who also need to borrow a lot at higher interest rates, for some reason. Unicorns
Let's not forget we could have had a soft landing for house prices in 2019 but the RBNZ desperately wanted to keep the music playing, so dropped the OCR in August 2019 to keep the bubble inflating.
In their own words:
The outlook for household spending was discussed with regard to the assumed dampening impact of soft house price inflation. Some members noted lower mortgage rates could contribute to a stronger pick-up in house price inflation, which could support consumption
https://www.rbnz.govt.nz/hub/news/2019/08/official-cash-rate-reduced-to…
Absolute incompetent muppets - and history will not be that kind to them
"stronger pick-up in house price inflation, which could support consumption" - but we don't measure that inflation in the CPI, so let's do it!
It seems to have been kind to Adrian Orr
More hard data that makes opinion pieces such as TA's Herald piece today look very biased.
TA has called 50/50 that NZ will go into a recession .....I truly hope it doesn't go into recession, but TA is just "playing the field" psychologically, as someone has to keep "the sheeple" in their oblivious state of mind, as to what is really happening.
''However there was a ray of hope, with Thompson reporting...''
That would be a death ray (if anyone recalls 1950's science fiction).....
Young relative just gone into negative equity in Auckland. Bought in early 2021, heeded parents advice to 'get the biggest loan possible as you can't go wrong with the propatee - use debt to your advantage'. Ouch.
Must suck being worth less than a bankrupt
Hard to believe but said relative is actually a discharged bankrupt. Company went bankrupt a decade ago.
I just hope existing company is not tied to the mortgage on the new property.........
If they had come here and used the Full-function Mortgage Calculator they'd see how daft that advice is ... irrespective of the market going up or down.
People, especially FTB, should limit themselves to 15 year mortgages or less. Or put another way, ensure from day one your first mortgage payment is paying off more capital than is being charged in interest.
I learnt this way back in the days of Visicalc. It's worked extremely well for me.
Except the banks don't like that. (I agree with you, btw).
We were turned down 9 years ago for a 75k mortgage in a small country town, with an income of 110k at the time. Reason given was "if you lose your job, you won't be able to pay your mortgage" - even at the 13 year term we wanted, said mortgage was $180pw, or a 40% of the rent we were paying. Affordable even on the UB. (Note we were only a year out of uni, so didn't have a huge deposit at the time - the attraction of the town was we could work remotely, and I grew up in the next town over).
REA for the area said, when we reported the mortgage broker's findings, that that was the issue they had there - the banks simply weren't lending in that town. A business decision, but not particularly ethical, I thought.
And then the government brought in the LVR requirements that kicked FHBs out of the market whilst enriching their landlords, which was the point we just simply gave up - not playing that game. Sadly, even if all FHBs had had our attitude, the specuvestors were still busy playing Hot Potato with each other, because that was how the game was played.
Gullible will still buy when they will listen to big stories from RE cartel.
As I said we reap what we sow.
Were young FHB gullible or just inexperienced? It's been over 30 years since any serious drop on property values. And for the last 20 years credible people have said property was overvalued and about to correct. I do feel sorry for those who bought their only home just before the music stopped.
Maybe they were unlucky. Just happened to be born at the wrong time... I don't think the average baby boomer in 1985 was more financially literate than they average gen Z in 2023... One group got lucky the other didn't. One gets a home and family and a pension. The other gets nothing.
One gets a home, pension and the other pays for it with no realistic expectation for their own, you mean.
Sorry but when you leave basics like 'family home ownership' up to luck then something is seriously wrong.
The big problem with this view is it ignores all the infrastructure and systems paid for by the previous generations.
And who said everyone gets to buy a house? That was a government pushed ideal in the 50s. When your partner would bring you your pipe and slippers when you got home.
Yes that Auckland Harbour bridge is such as asset these days?
Beats the ferry or the long way.
So some of the larger complaint is they didnt hand over enough.
WTB:amazing plug and play lifestyle.
So what are the young supposed to slave away to pay off their student loans and taxes so it pays for your super and medical needs until you kick the bucket at 95.
Then you take 40% of their PAYE for rent and those that manage to get out of being farmed they can be your exit liquidity for your overpriced shitboxes?
Doesnt sound too fair does it?
Man it is grim and selfish when you put it that way.
I mean it’s almost certainly debt funded over generations, so we’re probably paying for it too.
"As I said we reap what we sow."
Well said Ngutora, this means that those who sow nothing, reap nothing!
Yvil comment 🤣
Nice try at being a smart arse, but there are many many situations where sowing nothing would be better than sowing something.
Just look at the recent floods and the impact of removing all that native bush and sowing it with pastures and pines.
It's not "smart arse", it's just plain smart and true "those who sow nothing, reap nothing". Too many people want things for free.
If you're not attributing a contextual meaning to the expression then your statement is meaningless.
Those who sow violence reap violence.
Those who sow seeds reap fruit.
What sowing are you talking about? Buying houses or just meaningless smart arse generalities. So clarify what you mean by sowing seeds or the smart arse comment stands
Seriously I wouldn’t waste your time….
Ask Ngutora, it's his saying
Agreed.. That's called satisfaction. 😁😁😁
LOL my property loving associates that talk smack about bitcoin really be shining lights now.
When will foreclosures start, looking forward to seeing a ponzi collapse.
Ponzi collapse as in Bitcoin?
Graph shows prices increasing there! The bottom has been found
Graph shows a reduction in the pace of the decline NOT an increase (trend is still in negative territory). Probably a seasonal thing (summertime), looks like it's accelerating again.
yes its about to gap down as forced sales start next Q
banks have to be seen to go through the CCCFA rules and have the difficult but supportive conversations first....
Some people who tried to fix for 5 years at 2.99% and were rebuffed by banks using extremely faulty logic will be looking very closely at the CCFA about now. Methinks the banks might need to keep some cash back back to settle many of these claims.
Did this actually happen? Why would a bank refuse to let you fix at their offered rates? Sounds a bit tin foil headwear to me.
Does seem odd. I would rather see the CCCFA be put to work against flawed test rates than a few disgruntled borrowers that didn't get the fix rate they want.
"test rates" ... And that's how it worked. The banks would load a mortgage at 6.5% (or more) and say, "You can't afford it".
What they didn't do is:
1. allow for massive capital repayments that could be made in 5 years over a 20 year (or less) mortgage
2. allow for the inflationary effects on rents (say 4%) and incomes (say 3%)
And by declining (and often refusing to engage in any way and/or citing dubious or irrelevant "bank policy") the poor borrower gets screwed while the banks cream in the interest revenue for many years to come (because the massive capital repayments in the first 5 years couldn't be done.
Use the full function mortgage calculator here (https://www.interest.co.nz/calculators/full-function-mortgage-calculator) and you'll see what I mean.
I wonder how many people were treated this way?
Just to clarify. Are you saying that the banks wouldn't let existing borrowers fix for 5 years at 2.99%? Or is this new lending?
The flaw I'm referring to with the test rates, is the banks started testing in 2021 at 5.8%. Less than 12 months later their mortgage rates are above 6%. This is an extremely dishonest practice in my view. The test rates should have never been dropped. If only the test rates used when taking out a mortgage were the maximum a borrower could be charged throughout their loan term.
Love the optimism. (I'm assuming your tongue was firmly in your cheek.)
3.5 new listings for every property sold during peak selling season. Prices have fallen 20% since peak in Auckland but are still less affordable.
Points to more price falls to come
Yeah I mentioned that, they are in trouble expenses will be higher then revenues, think office rent etc etc etc sure most agents on commision only but there are a lot of good agents that employ people......
I know someone whose properties have bucked the trend, and apparently gone up in value over the last year. I asked their source of this information, and they said:
1. Their bank tells them based of local QV data.
2. Oneroof says so.
3. Homes says so.
Digging further, they may be right - all available houses in their area are being snapped up by Kainga Ora, who are paying significantly more than they houses were marketed for only a year ago.
You mean we're paying significantly more.
Average price down 7.9% and median down 8.9% compared to a year ago, ouch!
Importantly the median was UP 2.3 compared to January. Keep an eye out for what IS happening in 2023 not what happened in 2022
A straw being clutched
The median is not normalised for property type so is not a decent measure, whereas the REINZ Index is, and it dropped by 1.3% in January 2023.
Does the same apply to yvils comment or just when something positive is mentioned
Rhetorical question
How are rising shelter prices in anyway positive ?
Bang on!
Unless these numbers are adjusted for different housing topologies they can be meaningless over the short to medium term.
Case in point ... What's mostly selling at auction is either a) a tear down and develop, or, b) recently renovated and beautifully presented. New houses? Not so much. Scruffy? Not so much. Ordinary and/or lived in? Not so much.
Feb, March, and maybe April, will be outliers for 2023. These are the month when the most experienced people are selling and they know how to achieve both sales and prices. After April, we'll see plenty of dross and the 'flippers' will be less active as they struggle to get finance.
Barfoot & Thompson has been awarded the coveted title of 'Best International Real Estate Agency Over 20 Offices' at the highly competitive 2021-2022 International Property Awards (IPA) held at London's Savoy Hotel (25 February 2022).8/03/2022
🤣🤣 I almost fell off my perch when I was told this
Yes we know that you sit on that perch and Parrot from the Book of Spruiking.....
You've got to wonder who they might have bribed
2021 awards must have been champagne all round with diamond dust, complimentary cocaine and many attendees of the oldest profession. 2023 awards will be 3 people in a bus shelter rocking back and forth still in the denial phase while occasionally patting each other on the back and saying “remember last year when….”
Brian Tamaki has a reason why the market has crashed........
That's spot on
Seems a bit counterintuitive as most of the potential buyers should have been able to attend online auctions without going anywhere.
In fact its was opposite with covid specially with limits being imposed on people attending open homes or private viewings and restrictions on large gatherings.
Change, like winter, is coming. Agents finding alternative work, euro car repo and sale by auction, sale of Advo and Toast next to Barfoot etc branches plummet.
Auckland is way harder to sell in winter......
Hmmm, usually just lots of rain in winter, now its just rain all the time. Blame it on the rain...?
This must be sign of the time, the RE person who sold my home in Auckland few years ago. I notice she is selling quite a few items on Facebook marketplace; unused jewelleries, designer dresses, shoes.. next will be her 2 door sporty Merc!
Hope it's not financed then...
That’s an average of just over 5 sales per branch for Barfoots - that’s loss making territory and sure to result in many sales people leaving the industry or taking on some Uber work or other part time jobs!
20 to 25 years ago Barfoots had far less branches and a lot less salespeople so if this is the worst month in 25 years it truly is a shocker!
Is it possible that people had their minds on other things with floods etc. last month than real estate from Barfoot and Thompson.
It was obviously a factor. And I imagine since then significantly more due diligence will be being performed. Not to mention in the ensuing month the RBNZ ratcheted up the OCR again, and promised to keep going.
Personally I can't see anyone looking at the market now and not expecting significant further falls. Potential buyers pricing the falls in, and sellers stoically holding out.
Yes and with the talk of more houses becoming uninsurable, climate change extreme weather events becoming more frequent and unpredictable I can see a few people reconsidering whether it's worth taking a gamble on locking themselves into a lifetime of debt servitude to lease an asset from the bank that might not survive one of these events
And every week the price drops, tick, tick, tick, tock. Told a REA the other weekend that if the house doesn't have a price listed then they are losing money by the day for the time it isn't selling. Without a price who would go to all the lengths with an offer etc if the vendors could have 2021 expectations (current trend). The house had a price tag 3 days later.
just got a local place , real nice but with by deadline treaty... its Auckland..... not some shiteer in turangi...
One bedroom for 1.4 mil !
Is it 1st of April?
https://www.trademe.co.nz/a/property/new-homes/new-apartment/auckland/a…
5m2 balcony... its a stunning building 🤭
I agree with you for once
Auckland the next NY city. 😁😁😁. Lots of money in this financial capital printed and distributed by RBNZ for free or at very low credit.
Pathetic trying to be posh in sheep land…Look at our tall buildings in Auckland CBD 😂
Define this purchaser. Go.
The sharp slowdown in house price declines in February is more a “false dawn” than a fundamental shift in the housing market, experts say.
CoreLogic’s data shows price falls lost further momentum over the month as home values dropped by 0.14 per cent nationwide – the smallest monthly fall since interest rates started rising in May last year.
Sydney house prices rose by 0.3 per cent in February, boosted by the upper end of the market according to CoreLogic.
Sydney home values even managed to eke out a small 0.3 per cent gain during the month, helped by the stronger performance in the upper end of the market.
Tim Lawless, CoreLogic research director said the stabilisation in housing values in February coincided with consistently low advertised supply levels and a rise in auction clearance rates.
New listings have dropped by 17 per cent in the past four weeks compared with a year ago and are now sitting 11.9 per cent below the previous five-year average.
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Auction clearance rates also bounced back through February, with the capital city weighted average reaching the high 60 per cent range through the second half of the month, while Sydney clearance rates punched above 70 per cent in the week ending February 19, for the first time since February 2022.
But the improving trend might not last, as higher interest rates, weakening economic conditions and fading consumer confidence dent demand, Mr Lawless says.
Low listings
“Low listings are helping put a floor under price falls, but the downside risks still seem to be significant, when you consider interest rates will be moving higher,” he said.
“Considering the RBA’s move to a more hawkish stance at the February board meeting, along with an expectation for a weaker economic performance and a loosening in labour markets, there is a good chance this reprieve in the housing downturn could be shortlived.”
Home values in every capital city fell at a slower rate during the month, except Darwin, which posted a higher monthly decline. Meanwhile, prices in all capitals except Hobart fell by less than 0.5 per cent during the same period.
Shane Oliver, AMP Capital’s chief economist, said prices were likely to resume falling at a faster rate in the months ahead as higher interest rates slashed borrowing capacity further.
“It’s clear that some sort of market stabilisation is happening, particularly in Sydney, but I don’t think it’s sustainable. I think it’s probably a false dawn,” Dr Oliver said.
“The problem is that the constraint on the buyer’s capacity to borrow remains in place. It’s still getting worse. For someone with a 20 per cent deposit, this has fallen by about 27 per cent. Historically borrowing capacity has a rough correlation with house prices, so even if interest rates stop rising, that hit to the capacity to pay remains in place.”
Independent economist Chris Richardson said that while the momentum in price falls had slowed, the fundamentals had not changed.
“They’re continuing to worsen. And that says to me, this is a false dawn, not the start of a reversal. The improved result is more about strangled supply than it is about a sea change in fundamentals,” Mr Richardson said.
“We’re still about to get at least two and quite possibly three rate rises and then the reset of 880,000 fixed rate loans. Wage growth might have lifted, but it’s lifted from terrible to bad. So, there’s simply not enough shift in the fundamentals to move prices into recovery.
“So I think faster price falls would resume in the next few months, and they will continue through this year.”
During the three months to February, prices have fallen by 2.4 per cent and 2.7 per cent in Sydney and Melbourne, respectively. In Brisbane, they are down by 3.2 per cent.
Adelaide has dropped by 1.4 per cent, Canberra 2.7 per cent, Perth 0.2 per cent and Darwin 1 per cent. Hobart was the worst performer with a 4.9 per cent decline in home values.
Louis Christopher, managing director of SQM Research, said the price falls would quicken if interest rates rose above 4 per cent.
“If we break above 4 per cent, then these improving results will be a false dawn,” he said.
“This is one of the scenarios in our forecast where we start to see some strength return to the market, but then it eventually gets snuffed out by further rate rises.”
But independent economist Stephen Koukoulas believes the lower listings and a large rise in population could counter some impact of the rapid rate rises.
“I think we’re getting close to the bottom of the market,” he said.
“Further rate rises are clearly a negative for the housing market, but in my previous experience, rate hikes don’t always coincide with falling house prices. Between 2003 and 2008 when the RBA raised rates by 3 percentage points, house prices nationwide went up by 35 per cent because we had a big jump in population growth over that period and construction was low.
“We’re seeing similar dynamics now, and that’s one of the reasons why we will find this base in prices.”
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Nila Sweeney writes on property from our Sydney newsroom. Email Nila at nila.sweeney@afr.com.au
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You lost me when you used core logic data.
"The lady doth protest too much, methinks"
Shakespeare
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