By Bernard Hickey
Auckland's largest real estate agency group, Barfoot and Thompson, has released sales figures for April showing a drop in the number of sales and the average price from an exceptional March, but activity is moderately ahead of the same month a year ago.
Barfoot and Thompson Managing Director Peter Thompson said the figures for April showed the Auckland market's surge in March had depth.
Barfoot and Thompson reported it sold 723 properties in April. This is down 32% from 1,070 sold in March, but is up 7.7% from the 671 sold in April a year ago.
The average price for properties sold in April was NZ$544,975, which was down 6.2% from a record high NZ$581,190 in March, but up 0.6% from NZ$541,486 in April 2010.
“The average price of $581,190 in March, a record, was always recognised as a one off occurrence,” said Barfoot and Thompson Managing Director Peter Thompson.
"However, with April’s average price being close to $3500 above that for April last year, and the highest average price we have ever achieved in an April, it shows there is forward momentum in prices," he said.
“In each of the four months of this year, the average price achieved has exceeded that for its comparative month of the previous year," he sai.d
“Other than for March that increase has been modest, but there is a pattern of small gains."
Barfoot and Thompson's figures are closely watched because they are first sales and price figures for the month ahead of next week's national figures from REINZ for April. Also, Barfoot and Thompson is the biggest agency group in the country's biggest market.
Barfoot and Thompson said activity at the top end of the market remained particularly strong with a third of all those homes sold having values over NZ$750,000. There were 52 homes sold for more than NZ$1 million, 8 more than in April last year.
Thompson said the number of new homes listed in April at 1,033 was down a third on those for March and February, and down 21.3% from April last year.
“There is renewed interest in the Auckland market at present. However, this was countered in April through a lack of new listings," Thompson said.
See the sales data by individual region within Auckland here at Barfoot and Thompson's site.
South Auckland, Eastern Suburbs and West Auckland sales were down 20% in April from April a year ago. Central suburbs were up 26% in April from a year ago.
ASB comments
ASB economist Chris Tennent Brown said the data showed the property market in Auckland remained tight with reasonable turnover and lower listings.
"The ratio of monthly turnover to total inventory has been declining since October 2010, and last month eased further to 7.0 from 7.2 in March. This ratio was as 14.3 during the weakest period of the housing downturn over 2008," Tennent Brown said.
The average sales price was boosted in March by a high proportion of expensive property sales, but the composition of sales returned to more normal ratios in April, he said.
"As a result, the average sales price recorded by B&T declined from $581K to $545K over the month. Average prices within the B&T data over the past four months are up 2% on the corresponding period a year earlier," he said.
"Given the tightness in the Auckland housing market, we expect Auckland house prices will post gains in the range of 4-6% over the year ahead."
Tennent Brown said the contained level of inventory, positive migration, lower interest rates and population growth were all positive for the property market in Auckland.
"We expect stronger price appreciation in Auckland than elsewhere, particularly given the tightness of the region’s market."
(Update adds more detail, Barfoot and Thompson comment, ASB comment, link to regional data)
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90 Comments
This can't be true, Barfoot has made a mistake, the boom was all on again after last months data. Prices were climbing and more people were selling for higher prices than their over-inflated asking price...
What are we going to do? Oh dear, I think I need a cuddle!
Bernard you just don't change do you... it could have been
PROPERTY SALES AND PRICES CONTINUE RISE - BOTH UP FROM A YEAR AGO
but your rotten dead horse 30% property price fall carcass still makes a rattle when you kick it - but that rattle is echo in your head of a call you got way wrong, as usual you just like the media traffic and the sound of certainty that no-one can actually offer...
nice headline - not, you got it wrong you nong...
President of Property...
House prices fall by up to 20% as market thrown into reverse
http://news.scotsman.com/scotland/House-prices-fall-by-up.6762104.jp
...so what is the position compared with 2007 POP? Or what is the position in most other property market around the world that went up in the bubble? Come on President of Property, stop trying to inflate something over-inflated already or your own members, and their customers, will end the ones worst off.
This is exactly what I am finding in the Auckland market. Shortage of good properties to purchase, with prices steadily going up. I don't see this pattern changing anytime soon in Auckland. Bernard nothing like a good NEGATIVE banner to get things going! "Barfoot sales slide in April" could have equally been "Housing continues to firm"
Me too, a massive shortage of good properties in Auckland, but bloody hordes of crappy in-filled houses that have been sitting around the market for over a year, all over-priced and all fit for nothing more than crushing the spirits of the first-home buyer who may end up buying one in desperation.
I think March was just a blip, and given that the April sales were given as means and not medians, then who knows what really happened in the Auckland market last month? Especially given:
"Sales at the top end of the market remained particularly strong, with a third of the company's sales valued higher than $750,000. Fifty two homes were worth more than $1m."
Bring on house price fall, says ANZ
http://www.heraldsun.com.au/business/bring-on-house-price-fall-says-anz/story-e6frfh4f-1226049414480
Maybe you should try reading!
0.6% at 30 April 2011
6% at 31 March 2011
0.1% at 28 Feb 2011
2% at 31 Jan 2011
-4% at 31 Dec 2010
Your 10% increase was March last year. Either way the increases/decreases are only relevant to the time of purchase and what it cost the purchaser then. If you paid the average price in March 2011 you've just lost 6%.
"The average price for properties sold in April was NZ$544,975, which was down 6.2% from a record high NZ$581,190 in March, but up 0.6% from NZ$541,486 in April 2010."
Bernard's post mentions the average price for Auckland and not Central Auckland. And we all know that there are variations from suburb to suburb.
And if one were to compare the sale prices across the country , the mean sales prices for the last month show a -1% drop YOY
hmmm....
http://www.stuff.co.nz/business/industries/4958188/Irongate-tips-into-receivership
Irongate goes in to receivership citing - "We have spent considerable time reviewing all possible avenues to assist Irongate in meeting this payment of $45 million, but regrettably, due to a combination of factors including a weak property market, and strict time constraints following on from the July 2010 payment, Irongate has been unable to release sufficient cash from its assets,''
Of course I am not as smart as you Wastminster, but are you saying the effects of Irongate's collapse will have no economic impact on investors and that the health of buildings and indsutrial holdings sector has no impact on the rest of the NZ economy including the residential market...? So all these things work in isolation of each other?
The slight perkiness in the early months of 2011 was only due to seasonal factors, a sharp OCR cut and false expectations around the economy
I'd expect things to fall away further now that winter is here, emmigration picks up, job losses increase and there are no further OCR cuts
Well you wouldn't be the first to predict that here at interest.co.nz Matt, but you would be the first if it actually happens and you are right :)
Just so I dont get rained on: I cannot understand why property didn't take a tumble, I was convinced it would/should, so I am simply in a state of bafflement. I guess a version of Murphy's Law of Scientific inquiry applies to many things:
"You can control all the variables and conditions, but the organism will do whatever the hell it wants!"
Lets' take your $70k as writ, SK. Where has/will it come from? Higher wages? More borrowing? Chistchurch people who've lost a lot/everything fleeing the city? From the emmigrants who continue to leave looking for work ? From those who stay and loose their jobs? It really only comes from one place, doesn't it! Those who sell higher up the tree and 'downsize'. That leaves more and more 'expensive' properties for sale ( have a look through your local R/E mag. and see what's for sale!). And when that Top Stuff fails to sell, they'll drop their prices, compressing all those levels below them.
But isn't that just what this set of figures portrays, SK? March/April - large fall in prices due to lack of sales at The Top? And next month? When they still haven't sold, what's going to happen? Or the month after that etc.....Real Estate investors are just like any other asset investor. They, as a group, always hang on to a loss longer than is rational, hoping for 'that bounce back'. And when it doesn't come, they as a group, all try to exit at the same time. And it's only a matter of that time we are talking about! Cheap borrowing- is that going to last? Tax cuts - what about tax rises or property incentive cuts? And buyers 'waiting to buy' ? ~ they can rent forever if they wish. There's no law that says we all have to buy a property at some stage!
SK..you're a weird dude with your logic..you seem to extract only the figures that reinforce your odd rationale that overall everything is on a continuum upwards and is going in an eventual direction to suit your thinking...real estate has never affirmed that...it goes up...it goes down and this pathetic press release from barfoots is about as stupid as the one the other day from realestate.co where they told us some mug vendors were now asking higher prices..but not getting them.
but i'm wasting my time preaching to you mate 'cos you've missed the boat to sell your props..eh,cobber ?
because they're just averages,mate...here's another average prediction.
on average, everytime bernard releases new realestate data.. two twits called SK and Westminister will always turn up with some inane comment at least 4 times, in the given subject....and just like averages, your comments actually mean nothing because like averages , they'll be different next time....and will still mean nothing !
and as for you , westminster of munster...go get yourself an old abbey to muck around in or alternatively stick a fork in your arse and turn yourself over, mate..because you're done !
Yikes - monthly sales volumes fell by a third?
I wonder whether that's typical between March and April months?
I've got a feeling, when Aussie's slump gets going - Auckland will become a standstill - especially at that high end - as money heads across the Tasman for a 'bargain'.
People who own houses in the good suburbs of Auckland made 10% in the last year.
Not bad at all for all the doom and gloom going around.
Although world stock markets have performed suprisingly well also.
All in all - the losers would be the 'money in the bank' types.
I'm no economist but I have said from the start of the QE programme in the US and Europe that this had to distort the market. ALL markets, the stock market, metals, property. Anything that people see as an asset or investment vehicle.
Not just in the countries of origin, this disney money being printed is the lifeblood of the current world financial system (which is nothing more than a ponzi scheme). It makes the markets look good and that filters down to this end of the planet too. Inflation (which is much higher than Government figures/lies) is what will bring property prices down, along with slow price drop.
The BnT spin/crap is no different to Government unemployment figures, GDP figures, inflation figures etc. When statistics are produced by a body with a vested interest in what those statistics portray then those statistics are worse than useless. They are invariably lies.
wow wow weewa...this is the thread to hang out on....whooowee yesir..!
Putcha Dukes up....come on ......come on then.....I'll give you a bloody peek at the sea....but it'll be all that salty water a comin from your eyeballs ....ya big crybaby....ponzi leveraged....piece o floatsom.
do ya want some then ..?.uh do ya.....?
My apologies Bernard....real estate people have this odd effect on me.
I do so love a robust debate , the spar and parry , nip and tuck , the pitchfork up the arse ( nice touch , Rob ! ) .......... Ah , we are so energised and emotional about our property in NZ , aren't we ......
........ And Bernard plays on that fact . We're all just prawns in his little seafood cocktail .
Actually Bernard you could change the headline to:
"Last Throw of the Dice for Real Estate"
The statistics are actually consistent with that scenario, with the extreme of a bubble experiencing high volatility on the back of low volumes. It is that period of indecision in the market where the bears are starting to get ascendency of the few remaining bulls.
Lets put the squabbling about whether prices are going to rise or fall aside for a moment and look at the bigger picture. What is best for the community overall? Central suburbs (Remuera/Parnell/Ponsonby etc) are always going to hold there value being close to the CBD. But only highly paid professionals can afford these properties worth $700,000 plus. Central Auckland is mainly apartments with an average value of $250,000 which aren't exactly suitable for families with children so suit singles, international students etc.
On the fringes (West Auckland/South Auckland) it's mainly families with children and average household income ranging anywhere from $50k to maybe $150k. These are the groups where the increases in cost of living are going to have the most impact on income as well. What sense does it make that a new 3 bedroom in this area will cost $500k - $700k? What sense that a 3 bedroom house built 10 to 50 years ago is going to cost $400+?
It's a given that restrictive land supply is partially to blame for supply issues in Auckland. Central suburbs don't really have any spare land available and high density housing in this area isn't really going to work (NIMBY attitudes). So why on the fringes have so many 4+ bedroom/200+sqm properties on 500 - 600sqm sections been built? Wouldn't it have been better to build 150sqm (incl garage) 3 bedroom properties on 300sqm sections at half the price of above? What benefit in having an oversupply of overpriced properties that the average income earner can't afford?
Of course it was probably a waste of time even writing the above. The intelligent, sensible people here probably already agree with me and it's only the parasitic, self interested, greedy leeches who do not see the big picture.
"So why on the fringes have so many 4+ bedroom/200+sqm properties on 500 - 600sqm sections been built? Wouldn't it have been better to build 150sqm (incl garage) 3 bedroom properties on 300sqm sections at half the price of above?"
Because of the District Plans and NIMBYS. Same reason that the 20% of units in any Newmarket apartment building HAS to be $1M units - because of the District Plan (and how many have been built since that rule was introduced? - 0).
Actual paraphrased quote from Auckland City rule writer 5 years ago... "well if this rule makes housing unafordable in Auckland City poorer folk can just live in Waitakere or Manakau"
There is a new SuperCity plan on it's way which is best chance Auckland has of gettting affordable housing, although the NIMBYs will fight like crazy.
When are ALL real estate agents going to show some guts and publish and list the price that the property actually SOLD for in the past month ... not just the average price, which we know can be heavily influenced by just a few high value sales.....ie if there are 5 people in a room, each worth $1 million and Key walks into the room the average worth of each person becomes $10 million !!
They do this all over the world but not here because we're different ..... WHAT A LOAD OF CRAP !
I have and will continue to ignore the rantings of B&T et al , as they are just advertorials and that's it.
Haha..Ratmunster and his sidekick...like it. Christ-stove.
sorry Ratmunster ..no anger issues here.. just an innate ability to spot a tosser with a scatology problem from a mile off....i can understand why you're so aggressive though 'cos if i had to sit around staring at the yield on the slumholes you appear to own, i'd get a tad pissed off too.
anyway, now your arse is nice and toasted ..roll over one more time 'cos here comes the warm jets......
I guess I was one of the 'tame' neighbours, but there were a few people having a proper look around, the kind of look you take when you are more than just being nosy. True the agent could have been making up those offers, or they could be really low offers (although wouldn't you be better of waiting for the Auction if you think it is going to go cheap).
Has anyone else seen evidence of more interest in the centralish fringe suburbs like Roskill or Avondale etc?
FYI there's a new survey series from Tony Alexander at BNZ and REINZ that looks interesting.
It shows how agents feel and what they're seeing.
Here's the result in the first survey to the question: What are the main reasons people are buying?
The most common reason respondents cite for buyers looking for a property is that they are:
Trading down – 16%. Almost the same proportion cite Trading up at 15%. A high 14% cite Shifting into town and a worryingly high 12% cite Relationship breakdown! 11% of respondents feel that buyers are transacting because they feel the time is right to buy and that if they wait they may miss out.
Also: Why is the vendor selling?
Generally people are viewed as selling their houses because they need the money, they are trading down to something smaller, or their relationship has broken up. Only 4.2% of respondent answers were that vendors think prices are going to fall. That stands in contrast with the 33% of responses for the “What is holding buyers back” question being that buyers believe prices are going to fall. Therefore in one concrete set of numbers we see the large gap which exists between buyer and vendor expectations on price
Summary
Our first BNZ-REINZ Market Survey shows that on average around the country but particularly in Auckland buyers are appearing more frequently at Open Homes, backing out of sales at a decreasing rate, and becoming more active in auctions. There are more investors in the market but there is a more noticeable increased presence of first home buyers. Prices are still largely flat and a large gap continues between buyers believing house prices will fall further and sellers who largely believe prices will hold steady.
http://tonyalexander.co.nz/wp-content/uploads/2011/04/Survey-April-20.pdf
Could you please ask Tony Alexander to add:
Purchase intent: likelihood of buying in the next 12 months
Sales intent: likellihood of selling in the next 12 months
While this current survey is good, it focuses on why they've transacted. Most useful is to have a better read on supply and demand going forward - if they're likely to transact (e.g. like confidence measures but more specific to likely acitons with hosuing).
Also interesting for what it left out, the 50% or so of people that would have been buying in previous good times, but are not now.
A bit hard to assess who would or wouldn't have, so we just have to guess why that 50% are out of the market.
I am sure some of the good people on here can postulate.
the real give away in the B&T report is this: "activity at the top end of the market remained particularly strong with a third of all those homes sold having values over NZ$750,000. There were 52 homes sold for more than NZ$1 million, 8 more than in April last year"
in other words, even in Auckland, house prices are generally falling
Look guys, lets just end the debate here, property is THE investment to have, if you don't have it, you're a loser and you will never get ahead in life. At the end of the day you've just got to get down and do it.
When J.P.Morgan was having his shoes shined, and his shoe shine boy asked him if he wanted to buy some stock, he knew it was the right time to bail.
So you accept it for shares and yet its in-conceivable to you that the same cannot be said for housing? (or actually gold), thats very strange if so.
Have you looked at what happened to house prices in the GD as a guide? It was a credit crunch then and is now. So there is an interesting opinion that in a credit crunch house prices will fall to the level that ppl can afford to pay....and with no credit thats the cash they have saved.....indicating a drop of 70~90%....
regards
...they have a culture of hard work Jimbo. Also they have to save, as very little social welfare over there. If you lose your job....best to have a good bit of savings if no dole to back you up. In NZ where welfare has run amok, surpirse surprise, little incentive to save or work hard
Auckland's biggest real estate and rental management chain, Barfoot and Thompson, has reported its average weekly rent fell $13 a week to $421 in April from a record March ..
But aren't you living in Australia making thousands of dollars a minute, renting your 2 bedroom apartment in central auckland for $2000 a week, to four couples desperate to find anything for under $3000 a week?
Who cares what house prices do?
Isn't it more important that the purchasing power of our money is maintained? And if it's not, the big question is 'what do I do with all this cash I have in the bank that's losing value every week?'
Leave in bank - buy property - leave in bank - buy property - buy gold - leave in bank - buy tulips - leave in bank - buy property - buy big screen TV - buy property - leave in bank - buy shares - leave in bank - buy ???
PS - would you trust Govt facts and figures more than you trust B&T facts and figures?
Personally, what I find interesting about the released figures is what the picture looks like if you ignore the 'high-end' property sales. The quoted figures state that with 723 sales for April, at an average price of $544,975. But 1/3 (241) were over 750k and 52 properties over 1mil.
If we assume the best case scenario (in terms of minimising the outlier influence) and factor for 52x $1mil homes and 189x $750k homes - then the remainder of Auckland sales for April were 482 properties with a mean sale price of $415.5k
(if our assumption is wrong (which it will be) then that figure drops even further.)
House prices will keep falling for 5 years
http://www.guardian.co.uk/business/2011/may/05/house-prices-fall-five-years
Central Auckland is supposed to be going off and it does seem to me that more houses are being sold around me than 18 months ago. Although when I read the Auckland City Property Pulse factsheet March 2011 on Unconditional.co.nz which is based on the REINZ data is says the Central Auckland (city) median price is down 5% from a year ago to 520K. Confused, any explanations?
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