By Bernard Hickey
Auckland's largest real estate agency group, Barfoot and Thompson, has reported sales volumes in February of 619, which was up 9.9% from the traditionally slow January, but down 1.1% from February 2010.
Barfoot and Thompson's figures are watched closely because they are the first to report sales figures for the month and the agency group is the largest agency in the biggest real estate market.
Barfoot and Thompson said average rents fell to NZ$402/month week in February from NZ$419 in January, although the average was up 3% from February a year ago.
ASB said Barfoots' sales turnover was up 9.7% in seasonally adjusted terms and appeared to show stronger market activity than indicated by mortgage approval figures.
"Auckland housing data for February showed encouraging signs in February, after several very weak months of activity," Tennent Brown said.
"The Auckland property market appears tighter than other parts of the country," he said.
"Low construction over recent years, combined with ongoing population growth, is supportive for the Auckland property market. Over the next few quarters, we expect nationwide prices to remain down around 5-6% from the 2007 peak, and only recover gradually in the years ahead. The dynamics of the Auckland market will likely lead to price lifts that are stronger than the nationwide experience."
Barfoot and Thompson said the figures showed a resilient market.
The average price increased increased 1.2% to NZ$521,887. See the interactive chart below with detail.
“In February, the average price and the number of homes sold were virtually the same as in February last year,” said Barfoot and Thompson Managing Director Peter Thompson.
“The number of homes sold in the month is on a par with the number we have sold at this time of the year for the past four years, while the average price is the highest we have ever achieved for the month of February," he said.
“Another positive factor is that during the last three weeks of February the number of sales agreements reached were higher than for the same three week period last year. You have to go back 12 months to find when this last occurred. It adds up to a housing market that, while turning over relatively modestly, is holding up price wise.”
'The sellers are back'
Thompson said a key factor in revived interest was a return of new sellers.
“New listings at 1529 were close to what we would expect at this time of the year in a moderately active market. They were also up 70.6 percent on those for January, but that month’s new listings were exceptionally low and this comparative figure is somewhat misleading.”
Thompson said sales across the region and in the various price segments were consistent with regular patterns. See a breakdown of sales data by region here at Barfoots.
He said Barfoots had 6,053 homes on its books at the end of February, 3.4% more than in January, but down 3.1% on February last year.
“The key to the market continuing to turn over modestly is new listings. There is not a glut of homes on the market, there are buyers out there and there is competitive mortgage money available. What remains tight is choice.”
Rents up a bit from year ago.
The average weekly rent in February dropped by NZ$14 a week to NZ$402 from January’s all time high of NZ$416.
“The fall in weekly rent was anticipated as the normal influx of people into Auckland over January eased,” said Mr Thompson.
During the month Barfoot & Thompson rented 817 properties, on a par with the same number as January and 112 more than in February last year.
Economist reacts
ASB Economist Chris Tennent Brown said the data was encouraging after several weak months.
"There was a strong pick up in new listings, but total listings remained steady (both seasonally adjusted), which suggests some sellers are withdrawing their houses from the market if they are not selling," he said.
There was currently 8.6 months worth of inventory on the market, which was an improvement on the 10.3 months recorded in October 2010 when the Auckland market appeared at its weakest. This is supportive of prices, which are steady compared to a year ago, he said of the Barfoot and Thompson figures.
The Auckland property market appears tighter than other parts of the country, Tennent-Brown said.
(Updated with ASB comment. Corrected month to week when talking about rents)
Barfoot Auckland
Select chart tabs
94 Comments
No bloody wonder...banks throwing around cheap credit with Bollard's support and the regional migratory unemployed are all heading north..not too far north mind...leaving behind the ghosts of the bubble past, recognisable by the weed infested unsold subdivisions of sections the size of tennis courts and countless ex rentals...accidental rentals and the McMansions of the fools.
Pssssssst wanna buy a vineyard Gav?
So new listings up 70.6% in feb from jan.... and sales up only 9.9%...
The sellers have buckled first.... they're starting to unload and it is not being matched at all by cautious deleveraging buyers...
Rent up 3%, most likely less than inflation for the same period, so a decline in real terms... And this is auckland the place with the big 'shortage of rentals'.
so the facts don't back up the rhetoric that was being spouted by the herald and property spruikers about rents
THIS IS A VERY REVEALING COMMENT:
"Over the next few quarters, we expect nationwide prices to remain down around 5-6% from the 2007 peak, and only recover gradually in the years ahead "
...and going to where the work is. Oh! That's right...Australia. And those immigrants that thought they might try 'underpaid' work in New Zealand will now go to...Australia. Why go tho where thers is less work now? Looks good for rents to fall from here on in for those of us with jobs that can stay put.
rubbish
They will be voting with their feet by going to Aus
Already talked to a number of people in Auckland who now say this is the last straw they are moving to Aus
A lot of the big infrastructure projects that would have happened in Auck in the next 2 years will be shelved. A whole lot of work is going to disappear for engineers, contractors, builders etc. thousands of people will be affected. this will have further flow on effects onto hospitality, retail etc
Factor in soaring petrol and other costs, and property doesn't have a chance
Heck, even Barfoot themselves said things will be dead!
"...refugees head for Auckland.." the article states. Yes. Short term. But refugess have little or no means of support; no job and are looking for a future. That's not in Auckalnd, or New Zealand, with an increasing unemployment problem. Once they've reassessed the instant change to their lives, they'll be off. Leaving Auckland, or wherever it is, as empty, or emptier, than when they came.
I'm sure you're right ,Vera. And that's what the article said. And what are those people going to do? Compete for the jobs of those who are already there? Didn't someone post on here last week that Auckland unemployment is actually higher than the rest of the country? Of course that was before the earthquake, and I'm sure Christchucrch has taken over that title. And what will happen? People leave or accept lower wages to do an existing job. Looks like an employers heaven, and a 'refugees' hell, from here!
We Aucklanders are happy to help out where we can.
But if there is any implication that this is going to somehow boost the housing market in Auck, then that is fundamentaly mistaken.
these people are staying at refuge centres or friends / family's places, not rental properties. I know a few people who have come up and stayed with friends here for a few days, just as a break, then gone back down.
there aren't many jobs here, especially now big projects will be canned. Retail / hospitality is still dead. Sure we'll see some of these refugees stay here permanently, but eventually people will go back to ChCh or head to Australia where the job opportunities are much greater than Auck
BTW - I've been looking at a few places to buy, interest seems muted in the last week if the open homes are anything to go by, these are in good locaitons like Mt Eden. Might go to an auction or two and if there is a bargain to be had take it. Only if its a bargain though :)
Actually this headline in todays NBR online blurb may portend something spooky?
Real estate queen’s shock exitmaybe it's michael boulgaris but p/ly marnie adams...
So where does this leave NZ herald with their hyped up report about rentals going crazy?
IMHO, what it actually did was get more properties in the market by people who were thinking because of the "increased shortage of housing" this might get in investors.
However the sad fact is, the main underlying problem is credit (housing and business) and the sad state of the economy, which inevitably means that the house prices would get further depressed.
Honestly like a lot of people stated, NZ herald did not mention the fact that students tend to be living looking for houses in that time period and areas close UNI
Btw, Big Daddy, if you think people who would be deserting Christchurch would be coming into Auckland and other areas would cause a surge in demand on both sales and rental. You are dreaming.
These people are almost refugees, so they are gonna be having a extreme tough time with finances.
Its definitely getting harder in NZ to sell up and move across to Australia, with the cross rate becoming increasingly unfavourable and house sales slowing
I guess Chch refugees typically won't be able to purchase elsewhere until they have some sort of insurance payout. i can't see banks lending against their existing properties unless of course they only have minor damage.
Into the great unknown we go...
The good news is we don't need to fork out for Alice in Wonderland...not when we have a 'wonderland economy' and Mad Hatters in charge. Next week the bums on seats in Parliament will kick off another round of 'waste the money' ..
The refugees are heading south because the less costly property is down south...along with fatter Trout and Oysters, wild pig and Queen Scallops.
SK
These figures relate to a time period before the quake hit
Things have fundamentally changed since then
In Barfoot's own words:
"Over the next few quarters, we expect nationwide prices to remain down around 5-6% from the 2007 peak, and only recover gradually in the years ahead "
ONLY RECOVER GRADUALLY IN THE YEARS AHEAD
And this from the PERMA BULLS!!!!
Do you honestly not think Auckland's economy is going to be hit significantly too by this quake????
And if not, why?
I know that property values and rents are about to plummet and we're all going to die etc etc.
...however just curious about the Trademe listings.
There's usually 800-900 CBD apartments available (although middle of last year dropped to 600ish) and a few thousand other ithmus properties available - Currently theres about 350 CBD apartments and less than 900 other dwellings. Is that all student effect or have lots of listings gone off Trademe to somewhere else?
Re: Auckland. I went to a property seminar last week, they were trying to sell duplexes in Albany ($350k) in a staged subdivision of 600 dwellings by the Albany megacentre. The agent informed us that the stages would be rolled out across four-to-five years. Why? No demand! I also have a friend who works for Fletchers, they informed me att he beginning of this year that their two big projects in my neck-of-the-woods (Mount Wellington quarry and one situated a few minutes from the Slyvia Park mall) were taking a back seat. Why? Again, no demand!
And yet all I keep hearing about is a housing shortage in Auckland? Go figure!
Its not a bad choice - 15 mins from downtown Auckland, 5 minutes from Long Bay Regional Park, lots of protected forest and lifestyle blocks surrounding, town planning / landscaping, public transport hub, ever growing University campus, high decile schools, fresh housing stock, modern commercial center , humongous mall, law courts, North Harbour Stadium...
Raise the rents Landlords...And your tenants will move on, just like we did. They only raised it by a small amount , but enough for us to think why not find something bigger for similar price.
Was nervous at first with all the hoo-ha about rental shortages, but after a week have found a place. No queues like a previous year, in fact only five applicants, and we are talking about a 3 bedroom house in greenlane....
Now to keep the savings going up, so one day can invest....in something??
So rents fell in February...how did that happen?...Barfoots is the largest residential mgt company in Auckand...rents actually fell, when according to the media outlets hysteria had taken over the Auckland rental market, masses of people were turning up to open homes, the Herald said there was a rental squeeze and rents were soaring, it was on TV, Phil Goff got involved & landlords starting to enjoy life again...for those of you that go sucked in, Jan & Feb has a temporary undersupply of rental properties in inner-city suburbs, mainly due to students and people deciding to relocate after New Years, it happens every year...try not to get sucked in next time.
Later this year, I suspect we will see significant drop in sales volumes as there has been an active level of new listings coming onto the market in Feb as compared to Jan .
As far as house prices, it really depends on the area. Prices have probably already bottomed in some parts of New Zealand, and will bottom in other areas this year or next – depending on the local level of inventory and number of distressed sales.
Common usage?
average n
2. (Mathematics) Also called arithmetic mean the result obtained by adding the numbers or quantities in a set and dividing the total by the number of members in the set the average of 3, 4, and 8 is 5 http://www.thefreedictionary.com/averageWikipedia:
In mathematics, an average, or central tendency[1] of a data set is a measure of the "middle" value of the data set.
There are many different descriptive statistics that can be chosen as a measurement of the central tendency of the data items. These include arithmetic mean, the median and the mode. Other statistical measures such as the standard deviation and the range are called measures of spread and describe how spread out the data is.
An average is a single value that is meant to typify a list of values. If all the numbers in the list are the same, then this number should be used. If the numbers are not the same, the average is calculated by combining the values from the set in a specific way and computing a single number as being the average of the set.
The most common method is the arithmetic mean but there are many other types of central tendency, such as median (which is used most often when the distribution of the values is skewed with some small numbers of very high values, as seen with house prices or incomes).
no - just dealing in the facts
My posting was entirely factual, no emotion
I simply confirmed my earlier advice that Barfoots use of the term "Average" equated to a "mean"
I expect that "population growth" support that Barfoots keep discussing is going to fall away -
very likely that emmigration will increase and immigration will decrease significantly
I'd expect median price falls of at least 2-3% this year
The Dork... I mean Duke..
Min wage job is australia currently equals $20.50 NZ dollars per hour, or $NZ42,600/year assuming 40 hour week. Thats working at maccas or Target or Supermarket. Most literate enough to use PC will be doing a lot better than that.
The high aussy dollar, along with way better employment prospects, makes aussy a lot more attractive.
So what if your 10k savings in NZ now only 7300 aussy, instead of 7700 aussy. The move now relative to a few months ago costs you $400 extra assuming 10k NZ moved over. You'll make this back after the first few weeks of work
Check out Living Away From Home Allowance. If you are maintaining your New Zealand home, and you are in Australia for a short term contract, and you go back to NZ to maintain your contact with your residence, then you will likely be eligible for LAFHA.
That can defray those extra costs.... And if you want to send some of those Aussie dolleros back at the moment then the exchange rate is sort of ok at the moment.
"You might earn more in Australia, but you pay it back in higher rent, and higher taxes"
Actually I would have to disagree with that. I just moved from Australia around a month or so, and relatively speaking you pay roughly the same amount, ie Aussie $230-280 per week for one bedroom apartment in a good suburb.
However also remember you get paid more so as percentage of your income you are actually paying less.
However if you are thinking purchasing a property, they are way too higher than NZ.
Also cars are expensive as hell. $9000 would get you 10-15 year car with high mileage. If you or your friends are thinking of moving to Aus, look into shipping your car over with groupage.
Indiankiwi
I think at the end of the day it depends on the individual. Some will be better off there, some will be similar to here, some will be worse off
I certainly don't believe in the "universal grass is greener in Aus" story though
But for many kiwis it will make sense to go
Will be interesting what happens in the next year or two though - a significant slowdown in China could really crash Aus, then we might see a whole lot of kiwi "economic refugees" come back here
Me, I don't know about the China story. If I was to put money on it I'd say China won't crash, but it's GDP growth will drop 2-3% per annum, which wouldn't necessarily crash Aus, but would significantly affect it
Re; Barfoot &Thompson figures.
More listings = more desperate vendors,why would you list in this market?
Higher average sale price= lower number of sales,so av price stays ok
Big deveolper tips up in Tauranga,100's sections---$100mil of debt.
It is not getting any better.
If the average price this Feb - is the highest of any Feb on record - perhaps people feel like now is a good time to get a good price.
If you went to the barfoots auctions in the chancery you may be suprised at how much competition there is and how much money is being thrown around in the right suburbs.
One of my Sons moved to Australia about four years ago and is in what would be regarded as a well paying job.
However I have not seen that this has improved his net worth, in fact to the contary, I beleive he has gone backwards substantially, however he seems to enjoy the place.
Wages are certainly higher, but likewise are many of the "hidden costs"
The grass is not always greener on the other side of the fence.
For those of you who either don't know, don't remember, or weren't around, when the two oil shocks occurred in '72 and '78 the price of properties in inner Auckland, particularly Ponsonby, doubled overnight each time as the tree changers and outer fringe dwellers sold their life-style blocks and headed back to town. Big time. And the price of oil has just now popped above USD $100 pb. Will history repeat itself?
I remember similar ( Melbourne). The difference was that on both those ocassions we could borrow more money to move in from Frankston. Now, those 'out there' are borrowed to the max. and stuck out there. Maybe the same applies in NZ this time? I also recall it was a mongrel to try and sell the house we had, because everyone was trying to do the same thing at the same time. You had to take a loss, just to move into somewhere like St. Kilda.
Another thing - distance from CBD/workplace isn't so crucial now for a lot of people. We have working from home and/or telecommuting options that didn't exist in 1972. Obviously some people have to physically be at their workplace, but these days there's a significant proportion who don't, and are just as productive staying at home with a laptop.
I'll qualify that .. in 1972 in the time immediately after the oil shock .. house prices in Ponsonby doubled within 4 weeks. Ponsonby only. It was a specific suburb phenomenon. People were paying ridiculous prices for dumps. Ponsonby was a run down depressed area. The price of a dump in normal times is heavily discounted and depressed. They recovered their dump status and discounts disappeared overnight. At that time I purchased a section on the north shore for $4250. A week later I was offered $10,000. By 1978 those pressures had shifted to Grey Lynn and Westmere. Those two suburbs only. It was not City wide. By '78 Ponsonby had become "renovated suburb" and hardly moved.
Here's what Tony Alexander, chief economist for the BNZ said in a release an hour ago:
"The average sale price improved to $522,000 from $516,000 in January to lie 0.2% ahead of a year ago.
This price measure usually falls in January then bounces up in February so we read nothing into the monthly rise. Prices have on average fallen 2% in the past three months after rising 2% in the three months to November and we read that as showing prices are flat. Perhaps the only interesting thing which the more optimistic people might get excited about is that the usual monthly rise in the average sale price for February happened in spite of the proportion of sales for amounts over $1m falling to 12.2% from 15.3% last February and 15.2% in February 2009. That means maybe some price rises above normal for houses of less than $1m. But we would advise caution before jumping to any price rise conclusions." good to see all the spin is going from big Tony's sermon from the Mount?and for the prop.investors out there he has an email from a punter that says:
“We have seen a definite increase in foot traffic with genuine enquiry for property in Tokoroa with this month been our best month in sales for 2 years. We have 350 rental properties with huge interest from people happy to live in Tokoroa and commute to work in Hamilton, Tauranga, Taupo etc. We only hope the enquiry and sales continue.” unbelievable that people commute those distances....times are tough?!
yep he's run out of spin
after talking up property for much of the past two years (prices "edging higher") he's come to the realisation that he thinks its going to be flat for a while yet
Good on ya Tony!!!!
(now it only leaves Olly, the RE mob and a few of the die hard spruikers on this website)
Floating mortgage rates are obviously not floating (down). Are these products actually breaching their contract? - the reason people chose floating is to take the risk of hikes but then hopefully benefit from any interest rate drops.
If the only rate decreases are for fixed terms then only new borrowers will benefit. Or people on some floating segments who then are forced to fix in order to benefit from the rate decreases.
Wonderful manipulation by the banks ....
Banks are dropping their interest rates because they see the market going south, so to pick it up they know they have to raise the rates, because if people wise up and realize their house isn't really worth a heck of a lot, and that the only way to make decent money isn't through swapping houses with each other, then the jig is up, and the banks will lose a hell of a lot of money, so they have to lower the rates. But one day, the jig will be up :)
Just saw a Australian Documentary about the state of Ireland. It makes me very sad and I hope NZ does not turn into another Ireland
http://www.youtube.com/watch?v=Qz7WeEbSpYo&feature=channel_video_title
Maybe someone should show this to Phil Goff, who are keen on proping up the property market
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.