The first half of 2011 will be the best time to act for homeowners looking to sell their properties during the year, the Managing Director of Auckland's biggest real estate agency group Barfoot & Thompson says.
Positive activity out in the field pointed to another steady year ahead in 2011, Peter Thompson said when releasing the group's sales figures for December.
“We are anticipating a good start to 2011, with an increase in listings and sales early in the New Year. However, any increases to the average sales prices over the course of the year are likely to be incremental," Thompson said.
“We are also cautious that outside factors, including the Rugby World Cup and the Election, could have an impact on the market later in the year. For homeowners considering selling, we therefore recommend that the first half of the year is the best time to act,” he said.
December figures
Barfoots reported 524 property sales in the first three weeks of December 2010, down 19.1% from the same period a year ago.
The average sale price for the month was NZ$529,682, down 4.2% from December 2009 and down 4.4% from November 2010.
'2010 a steady and quietly confident year'
Barfoot Managing Director Peter Thompson said the average sale price over the 2010 year was NZ$529,648, up 1.4% from the 2009 average of NZ$522,297.
The overall picture of 2010 was one of stability and quiet confidence on the part of both buyers and sellers, Thompson said.
“While the average number of homes sold per month over 2010, at around 665 homes, was down on the 2009 average of around 780, monthly sales volumes particularly in the second part of the year held steady,” Thompson said.
Barfoots was starting the new year with 5,865 properties on its books, up 8% from a year ago.
See the release from Barfoot and Thompson:
Figures released today by Barfoot & Thompson show Auckland’s housing market has run at a steady pace throughout 2010, with new listings and average sale prices for the year consistent with 2009.
“The average sale price over the course of 2010 was $529,648, an incremental increase of 1.4 percent over the 2009 average of $522,297,” said Peter Thompson, Managing Director of Barfoot & Thompson.
“Similarly, new listings per month during 2010 averaged 1314, almost identical to the 2009 average of 1319.”
Mr Thompson said the overall picture of 2010 was one of stability and quiet confidence on the part of both buyers and sellers.
“While the average number of homes sold per month over 2010, at around 665 homes, was down on the 2009 average of around 780, monthly sales volumes particularly in the second part of the year held steady.”
Traditional seasonal factors also played a considerable role in market activity in the past year.
“The first quarter of a year is typically energetic and 2010 had a particularly strong first half. This was kicked off in late January with a momentum built through robust renewal in new listings, consistent sales volumes and growth in average sale prices.”
Mr Thompson said it was a social reality that the weeks just before Christmas signalled a slower sales period, as Aucklanders turned their focus to holiday plans.
“Matching the seasonal trend, December’s new listings decreased by more than half to 737, sales volumes dropped by 21.6 percent to 524 and the average sale price took a small dip of 4.4 percent between November and December 2010*.”
Comparing December year on year, the month’s new listings were down 23.6 percent, the number of sales was down 19.1 percent and the average sales price was down 4.2 percent to $529,682.”
Barfoot & Thompson enters the New Year with 5865 properties on its books, 8.0 percent more than December 2009.
Mr Thompson said the positive activity out in the field points to another steady year ahead in 2011.
“We are anticipating a good start to 2011, with an increase in listings and sales early in the New Year.
“However, any increases to the average sales prices over the course of the year are likely to be incremental.
“We are also cautious that outside factors, including the Rugby World Cup and the Election, could have an impact on the market later in the year. For homeowners considering selling, we therefore recommend that the first half of the year is the best time to act.”
*December 2010 statistics are for the first three weeks of the month, after which the statistics were closed off for the year.
Rentals
Continued increases in the average weekly rent in 2010 culminated with an annual average of $403, up $15 or 3.9 percent on the 2009 average of $388.
The average weekly rent for the month of December 2010 held at $411, a record high set in November.
The company rented out 590 properties in December and an average of 713 per month throughout the 2010 year, on par with 2009.
Mr Thompson said the expectation was that rental activity would increase again in January and February 2011 as renters return from holidays to re-evaluate their living arrangements and as students and workers make an influx into Auckland.
(Updates with new head paragraphs)
Barfoot Auckland
Select chart tabs
54 Comments
.......... If the stockmarket turn-over was down 19 % in December , compared to December a year ago , I'd be a glummy Gummy . .... ...... There'd be a crappy nappy for Mummy Gummy to wash up ........
.. ..... But Peter Thompson sees stability and a quiet confidence !
Wow , these real estate guys are full of confidence , up-beat , glass-half-full types . Gosh ! And some here used to call me Pollyanna .
hope so Wolly, though xmas retail figures were not as expected. Driving around Auckland during the holiday period there weren't many shops not opened (Labour's 2003 Holiday Act is to blame for this) and a lot of empty offices and retail premises to let.
On a brighter note, export was up in November and a business survey indicates optimism for 2011.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10698834
http://www.stuff.co.nz/business/money/4524009/Better-outlook-tipped
I'n not a fan of "averages", but as at last month, annualised property sales were running at about 50,000 pa, down from 100,000 pa, and there were 17,000 real-estate agents currenlty active. On average, thats 3 sales per agent per year. Not very sustainable. The attrition rate must be pretty high.
Surely the "best time to sell" is NEVER? If property is all it's cracked up to be by many of the myopic lot who repeatably post here then why sell only to make a middleman richer? ie. Real Estate agents. You don't ever sell good assets, logic dictates this. But...........ohhhh.......what's that? your indebt up to your eyesballs and facing YEARS of negative equity? well what makes you think I want that 'great asset' now?
Justice has a valid point about negative equity , especially if interest rates rise rapidly due to factors beyond RBNZ control .
I spoke to a few Agents in Albany , Grenhithe, Glenfield and Coatesville over the break , and it seems that the more expensive properties are selling , the run down stuff and blue collar areas are dead .
There are many business owners trying to sell high end properties that are hocked to the hilt , and this may explain why the average price has risen YOY . The volume stuff in not so well off areas has slumped .
There is also some anecdotal evidence of investors unwinding their positions in the residential market .
These guys are possibly the first wave of informed investors getting out before the demise of the LAQC regime from 1October this year , that has been so favorable to high earners.
Using this logic , Thompson is probably right suggesting you get out before June 2011
i think the wealthy are selling down to get cashflow to maintain their faltering businesses as i get it on feedback... so Boatmans right about high end props.selling...hence the reason the skewed median prices still show sustainablility...but they actually mean nothing in reality......it's like watching a train crash in sloMo is the ole property mkt....it ain't ever coming back up until all the wicked BB's are dead and long gone.
I agree what i'm seeing are business people whos income is not holding up with the economic cycle (often developers) while those buying are high level professionals, legal, medical and managing/senior partners etc of accounting firms etc. plus old money :-)
Some from overseas (especially asia) and less from the UK and US currently.
So what are "...high level professionals, legal, medical and managing/senior partners etc of accounting firms etc. plus old money .." if not business people? Those that you note have 'income (that) is not holding up with the economic cycle' are either directly business people or work direclty for a business? And your right! Their incomes, relative to their expenditure, is not holding up. In that environment there's only one way for property prices to go, as those 'with it' realise that buying is not a sensible business thing to do at the moment.
Well you can say they are all business people, yet the key is some have more robust incomes and often at a higher level than others, take specalist medial professionals and QCs who consistently earn seven figures in this country. They are more practioners in my thinking than true business people in many cases. They are part of the syetm as as Matt says protected...They earn it year end year out. Look at the surburban breakdown with those that are popular with the traditional professions and those that attract the smaller business people - who often earn high for a period of time however usually the minority maintain it for an extended period of time.
A clear example is Fendalton(professions) vs Sumner(smaller enterprise) concentration in Chrsitchurch. Havn't live in Auckland for a while so will not comment. One area stay firm while the other dips and is more volatile in a downturn.
ps Purcahsing is only for a small group a business decision for most it is emotional
So why were all Fendalton properties half the price there are now, 10 years ago? Answer: Because all properties were half the price they are now, 10 years ago! So if all but the 'top end' professionals lose their purchasing power ( the Sumnerites), do you think that a general property price fall will keep Fendalton immune from a fall? As some one said this morning "A rising tide floats all boats" .It works with a falling tide as well..
Actually I see I need to be more precise to make my point...Christchurch is more street by street in a suburb, possibly not the best example. The top tier have not moved as much over the last ten years...certainly not doubled. I have friends who has two places in the same road which is top tier for Christchurch fewer transactions as they are in the multi-million bracket down south...yet limited supply of this quality home makes them in demand, naturally smaller scale than Auckland.... however the mid tier where the aspirational class go for can double as it is a fundementally lower price point/range and with debt....this is the case for much of Fendalton.
I have a place in Santa Monica in Califonia overlooking the pacfic which I purchased in 1989..used my US business to pay it off over the last twenty years, a area where more people at the top tier want to be...it has actually appreciated over the last three years regardless of the American economy and I have several unsolicited offers per year...suspect Auckland has a greater dynamic than Christchurch yet rather small than greater LA. The top tier is small and has great demand in any city...the same applies for world class properties.
I suspect your point has more to do with 'those that don't want to/have to sell their homes' in those areas, don't. So velocity is lower. That's very true. And, by the way, I have no problem with whomever paying whatever they like for their home. But at some stage there will be chosen or forced sales in those streets, and without a 'next tier' of buyer, the transaction price will be lower. The value of any untransacted property is unchanged, as it has not met the market. But at some stage all property meets the market. It's only a matter of time; even your Santa Monica residence. At transaction time, it will sell at whatever the market deems; and if there are fewer buyer with the wherewithall to pay, the price will be lower. What, until recently, has given the next tier purchasing power? Debt...
no, you work on the assumption that sales will face lower demand, in most case that is true currently however not necessarily for the top tier. There is excess demand at certain locations and property is scarce. Top tier has an international market place in many instances...so Santa Monica is filled with more Arabs and Asias than Americans than in the past...it may be other Nationalities in the future reflecting who has the wealth...internationally.
I digress from where we started...
I entirely agree with you comments on the mid-market, middle aspirational classes can only get there with debt.....
They are vulnerable...in Auckland the upper professional class/old money are nor limited by debt on the same level....it is our top tier.
coo... I just discovered zoodle - more graphs.
Fendalton rentals up 37.5% etc.
and http://www.emigratenz.org/forum/archive/index.php/t-7710.html
just teasing.....
they refer to "average prices". Is this an error (do they mean "median") or are they really using average (mean) prices?
If they are using average (mean) prices then that would be distorting the stats as there has been much more activity at the higher end of the market. That also distorts the median figures, but not as much as the average!!!!
"while those buying are high level professionals, legal, medical and managing/senior partners etc of accounting firms etc. plus old money :-)"
I agree with that view. Its people in the "protected" industries who still are doing fine and can buy up property.
But they would only account for perhaps 1.5 - 2% of the population. That explains why a certain amount of higher end property is still changing hands, distorting median and mean prices
It's interesting that Barfoot's has chosen to focus on 2010 as a whole to demonstrate that the market is "stable", and the atrocious December figures can be fudged and glossed over.
And what does "quiet confidence" mean? Definitely some agent talk there. Similar to saying that a shoebox studio apartment is "cosy."
I'm assuming Peter T, by saying best time to sell, means more buyers therefore better chance to sell, better price likely in first half of the year compared with 2nd half of year. You think he's got it wrong, has vested interest talking market up, blah blah...
Having been involved in the property industry for many years and running one of NZs most successful RE companies...he's probably right...and that p****s you off doesn't it.
No mate, actually it doesn't piss me off, quite the opposite, it's entertaining...myself having worked in property for six years with valuers, developers, agents, managers, owners, council etc....I can tell you that Peter T doesn't give a balanced view of the real estate market, as his business model is based on values going up otherwise listings dry up...the Dec figures have dropped off a cliff and he's still saying things are great...imagine if the trend was the other way, a huge spike for Dec, Peter T would isolate the Dec figures and jump all over it, sell everybody sell sell!!!....but no, he backs off and looks at 2010 as a whole and says we have "quiet confidence" - hahahahaha
S'truth!!
I go away a few days and lo and behold the whingers are back in full force.
Look you lot- given that Barfoots would but the best shine on it, the fact is that y-o-y the market has remained practically flat just as predicted by the great expert:
http://www.interest.co.nz/property/double-shot-interview-property-inves…
And while we are at it:
It is simply dumb to look at one months figures and say that is " the market" especially in matters of real estate. You look at the trend over many months or even a year and in this case there was a very marginal lift in prices- but flat for all intents and purposes.
The market can wobble around plus or minus 5% and it means nothing. If however the market trends down 5% every quarter for 6-12 months then the whingers will have their day in the sun even if they are unemployed, on the dole and stoney broke in the process.
the crib/bach sector would appear to be turning to shit--lots of people trying to free up funds?is this just an otago thing or nz wide?
http://www.odt.co.nz/regions/otago/143725/crib-sales-slow-right-down?page=0%2C0
this quote from reinz otago,s liz nidd shows a bit of reality
Those vendors were in "extreme land", she said. "There is still demand for holiday homes, at the right price. However, the right price is probably a price vendors would say is a bargain.
I think 2010 wasn't as bad as some people expected. But it was the start of the cooling of a pretty hot bubble. People are wise and with the news today of economists predicting mortgage rates jumping up then people will be even more careful. Kiwi's don't like making a loss on real estate. It's been engrained in us that property only goes up. It will take time and I think some will stay put if they were to make a loss. My mates in the UK who have wanted to move have sold low and bought low.
One other factor infuencing the first home buyer is the often very high levels of personal debt - which in many cases means that even if they have solid jobs & good incomes,they fall way outside bank lending criteria. I have personal experience of couples with from $50,000-$100,000 of debt who are seeking (unsuccessfully) a mortgage. People buying at the high end of the market probably arent disadvantaged by high levels of personal debt.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.