Prospective home buyers in Auckland are facing slim pickings with listed properties last month having dipped to a four-year low.
Realtor's Barfoot & Thompson, in a housing report released Tuesday, blamed the contraction in the market on economic uncertainty with fretful would-be sellers sitting it out on the sidelines waiting for clarity.
"Choice at present in Auckland is severely restricted,” said Barfoot's manager director Peter Thompson.
"Many current home owners appear to be putting off making decisions about property until they have a better feel for where the economy is heading.''
At the end of June, Barfoot's had 5,067 properties on its books for Auckland. The last time it was that low was in August 2007.
Thompson said new listings for June totaling, 1,253, were consistent with May's numbers (1,169) and June 2010 (1,194) but were "not sufficient to improve the lack of choice which has been tight for the past three months.''
Sales even across price ranges
Sales in June were spread evenly across the region, and all price brackets.
While tight conditions would normally be good news for housing prices and sales volumes, Thompson said that was not the case in today's climate.
"Sales volumes were steady in June with 873 properties sold, and were down 1.8 per cent on May’s sales. However, they were up 31.3% on those for June last year, continuing a four- month trend of this year’s sales being higher than those for the corresponding month last year.
"Prices also eased in June compared, with the average price reaching $521,019, down 1.6% on the average price in May, and down $2,000 on the average price for June last year."
While demand was for properties was robust, Thomson said confidence in the future of the economy was lagging "creating a natural brake on the willingness of owners and buyers to commit to moving on with their housing plans.''
Barfoot & Thompson is forecasting the situation to remain more or less unchanged until late spring.
'Sellers market'
ASB economist Jane Turner said inventory had fallen to below average levels, which typically sees the balance of supply and demand shift in favour of sellers.
"We expect house prices in Auckland will start to rise in coming months as a result," Turner said.
She said Auckland housing demand had improved ahead of the rest of the country, and remained firm in June.
"Turnover has hovered around current levels over recent months, suggesting the recovery in housing demand is not gaining further momentum," Turner said.
"Nonetheless, the supply of housing on the market is becoming tight, and will likely add to house price inflation pressures in coming months. The recovery in housing demand has been more subdued in the rest of the country, and we expect this trend will be confirmed when the June Real Estate Institute of New Zealand nationwide house sales data is released."
| Period | Number of Sales* | Volume of Sales |
| June 2011 | 873 Properties | $454,849,622 |
| June 2010 | 665 Properties | $347,834,232 |
| 12 Months to June 2011 | 8,460 Properties | $4,537,912,904 |
| 12 Months to June 2010 | 9,171 Properties | $4,894,674,036 |
*Excludes Northland and Commercial Click here for full list of sales
Rents fall in June
Barfoot and Thompson said the average weekly rent for Auckland property in June fell to NZ$420 from May’s NZ$427. It was based on 707 new rental agreements (704 in May).
“Average weekly rents are extremely volatile in a market where demand far exceeds supply,” said Peter Thompson, Managing Director of Barfoot & Thompson.
“In the past six months average weekly rents have ranged from a high of $434 to a low of $402, and we have never before experienced this level of movement in any six month period." Thompson said.
“The low level of building activity in the past three years combined with the growing population of Auckland is creating pressures on the existing stock of rental properties. “The average weekly rent for this June is the third highest on record, and was $17 higher than last year and $32 higher than two years ago,” he said.
Trade Me rental trends
Here's Trade Me's analysis of rents nationally:
National rental supply has eased over the past quarter, and demand has crept up according to an analysis of listings on Trade Me Property.
Brendon Skipper, head of Trade Me Property, said the number of rental properties listed had levelled off. “Supply is still up but only by 2%, so there’s been a shift down from the lofty heights of the 11% surge we saw last quarter.”
He said the ease in supply has been led by a fall in the number of properties listed for rent in several major metropolitan areas including Auckland (-12%), Christchurch (-6%) and Wellington (-2%).
Auckland was once again a standout as a great place to be a landlord. As well as the massive 12% drop in rental listings on the same quarter a year ago, average rent also jumped 9%. Mr Skipper said this showed that increased demand – enquiries were up 7% -was affecting rental prices and property owners were making the most of it.
In the North Shore there was also a drop in listings (-9%), but the impact on rent had been less significant. “Over the bridge the asking price for rent increased by 4%, but this was pretty much in line with what we saw nationally where rent ticked up 3%,” Mr Skipper said.
He said next quarter was likely to see further pressure piled onto the Auckland rental market with the Rugby World Cup soaking up supply, and people “coming out of hibernation” to look for a new place to live in spring.
It was no surprise to see Christchurch listings had taken a dip (-6%), with demand heading up (+9%). As observed last quarter, the average weekly rent being sought by landlords was not exorbitant, up 5%.
Mr Skipper said the citywide picture was a little misleading. “If we drill down into the suburb-by-suburb picture, it’s clear that there are areas where both supply and demand is very low. On the flipside, in less quake-affected parts of the city, demand is extremely high and supply is struggling to keep pace. We expect this will be the case for the foreseeable future.”
Wellington bucked the trend and saw a drop in average rent of 3%, making it the only area in New Zealand where rent declined. “This is a hangover from the city’s massive 17% increase in listings last quarter,” Mr Skipper said. “On the back of that influx, landlords are now finding it trickier to lock in tenants and are lowering rents to entice them. It’s a good time to be a tenant hunting a place to live in the capital.”
(Update adds comments from ASB economist Jane Turner, detail on rents).
Barfoot Auckland
Select chart tabs
85 Comments
This is all Spin Spin Spin like a boy racer on a Saturday night.
The truth is simply the following
1) B&T point out that in the press release they are listing more than they are selling (about 3 new lisitngs for every 2 sold ) . Thats are crashed market in anyones language
2)There is a spike in Mortgagee sales right at present, an indicator of an extremely stressed market .
3) Many potential sellers are under water ( Their properties are hocked to the Banks for more than they are worth). They wont be able to sell anytime soon
4) Banks are wanting between $40,000 and $80,000 in cash deposit on an average price home . Kiwi's at the bottom end of the market have no savings whatsoever .
5) House asking prices remain so high they are unreasonable . In some cases at multiples of 10 to annual gross income , when they should be at 3 x annual income .
6) The average selling price of a home in a US city is US $165,000 and in Auckland its around NZ$500,000 to $600,000
7) Kiwi households are almost in as much debt as the Greeks as a % of household income .
8) Kiwi's are not dumb , they know interest rates will go up , they also know they should be using this period of low rates to reduce debt, not race out a buy a new house .
I wonder if the dumb jokers in the Real Esate Industry even realises all this ?
The RE "industry" and the likes of Olly can't blame vendors for being reluctant to list when they are being fed outrageous nonsense such as "rents doubling in two years" or " it's a great time to buy".
Talk about shooting yourself in the foot! Why don't they just STFU and let the market take it's course.
re: rents
we live in the Auckland grammar zone and monitor the rental market quite a lot
there's a quite a few properties that have been advertised for rent for weeks, and their asking rents have dropped quite significantly from their original position
Because as much as the Ollys of this world would like to believe that rents will double in two years, so long as wages are only creeping up and the general costs of living continues to rise, thats simply just wishful thinking
Ha - what a bunch of journalistic muppets with no sense of maths or integrity. Case in point: the relationship between listings and sales, "inventory", is one you drone on about when listings are high and sales are low. You talk about how inventory is so high! Now the inverse is true, listings are low and sales are high (31% growth year on year), and inventory is rapidly falling away. In this circumstance you point to slim listings blah blah blah.
So - which way is it?
Or is that muppet BH - the mercantilist - dictating policy here? Thank god he doesn't have any position of power and can only influence dullards. He should complete a post graduate in economics - having him speak to economics is to actual economists the same as having any tom dick and harry off the street opining to the correct technical surgical heart procedure.
Dear Keyser: As one of the "muppets" you are lambasting here and the scribe of said inflammatory story (the messenger is always such an easy target), I would like to extend to you an invitation to come enlighten me on why your version of real estate economics is the ultimate truth. Sincere offer. BH had nothing to do with this one-sided real estate report. I'll take the blame here. You can put me in your firing line. They issue us with flak jackets when we graduate from lowly journalism schools. Mine's a little worn out, but still works. Cheers, Amanda amanda.morrall@interest.co.nz
HA - just saw this - funny assumption. From where I work I could tell you a lot about shorting bad real estate exposures, buying up pe loans at 50c on the dollar, major mortgagee sales, etc from my experience a buyside economist for one of those nasty tentacle laden international investment banks. Couldnt tell ya much bout bayles but have got great goss on the next australasian pe investments that will be sold by the banks in the next 6 months. Maybe i am a bit prickly but the way you guys describe the property market raises my hair. I'll tell you one thing - the best public and mainsream bit of analysis that is simple to understand (albeit vested interest) is the mike pero/infometrics property indicator. It is very accurate. We are in an upswing in the property market, that will be underpinned by high volumes and low supply, that will temporarily increase prices which will drive prices up. Some risk from an earlier than expected volley of interest rate rises and a very negative dip in migration over last 4 months. Expect this activity to have a very good impact on retail spending - am long on cyclicals and retail over next 6 months. Would expect listed stocks like ppe, michael hill, etc to have a 6 month run, with catalysts to the upside over next month to start rally, and players like fletchers to have a good impact, albeit need a short term catalyst. But those are my picks - (and i have a vested interest).
Keyser , I dont think anyone at Interest.co.nz wrote the article , and Amanda probably edited it.
But I could be wrong .
I strongly suspect that this was a press release from B&T's publicity agents . Yes they have these modern day " Town Criers" , much like the jokers we saw in the Wizard of Oz cartoons .
Either way its spin , and you're right its meaningless and irrelevant , because what we are seeing does not equal the spin
Hmmm it looks more like things are stabilising or have stablised....back to before the bubble/boom and the unstabity post boom....
Or put simply...rather than reading so much into it..... the markets are normal...
have a look at the long term statys including the left side of the graphs
What a bunch of losers. With all the evidence staring you in the face, you still can't confess that you got it wrong.
The property market remains healthy to the most part, and low interest rates, immigration, leaky homes, the Christchurch disaster and off the table building starts, makes the NZ property market unique when compared to other countries.
Now go and write out 1000 times
"Olly Newland was right all along"
and stop whinging.
OK say we have got 2 years until the S.. hits the fan, what do you suggest we focus on now, so we are as prepared as we can be??
Debt free?
Lots of $$$ under the bed
A few chickens plus a healthy patch of greens? Maybe even a cow?
or shall we sell the home now and invest in ???
Harry...the only paper to put under the bed is a ton of real bog paper( buy in bulk), load up on what you need plus rifle, ammo and predator, trailer, 4wd and a stonking huge tank full of diesel. Mind you avoid the rail diesel engine crap. Bung a large freezer in the 4wd and a geny in the back to run it. Need that for the fish and game mate. And look after them chooks.
Olly Newland is for the most part a leech on society. Sucking out profits from his neighbours through capital gains and his participation in the fraudulent financial system to his own advantage.
No room for that sort of scum around here so take your mantra and piss off.
Well Gareth I have made the comment on plenty of occasions that those who chase capital gains are parasites, I have even used sewer scum.
It is behaviour that is detrimental and destructive to society.
They think they are businessmen, but they are not. The produce nothing of value.
It isn't even capitalism for two reasons, one they don't produce anything, and two they use other peoples money not thier own.
They come on here and spout off about the rising prices but they never have an reply to my accusation.
You only need to walk around at street level and see the sad state of the retail industry. Here in New Market many shop vacant and empty of buyers and every shop has a sale sign up desperate to do a transaction.
Thats small dollars compared to the property market. Many empty/vacant houses around rotting at the foundations.
All this angst over Rhubarb boxes cladd in crappy cement board on silly little plots. Like most of the 'houses', it's not worth the candle.
Now who's for a slice of the piigs.....nice bit of bacon there....I hear the Greeks are betting on the Greek govt defaulting...what could possibly be a better guide to follow. I wonder how many of the Greek pollies are placing said bets...now that would be funny to know. And which way are the Germans betting...and the Frogs...oh what fun.
We are noting the facts at ground level; the interpretations that stats, graphs and charts don't relay.
Correct Its not looking good.
In many ways one does not want the responsibility of a property and all it entails - particulalry debt. Better to be liquid/mobile keeping ones options open.
Yes, I tend to agree with you Big Daddy.....this site seems to have a fair share of simple minded whingers.
Every year since the GFC ......China is going to have a property crash?
Australia going to fall apart completely?
We are endlessly quoted abscure economists and equally opiniated blog sites who are nothing more than sound off platforms with virtually no factual information other than figures conjured up to suit their most idiotic fantasies(far fetched notions).
Realist, you are right...there are some whingers on this site...but many of their views are based on sound fundamentals...take Australia for example, Sydney's average house price is 9.6 times average household income....China is considerably worse - 20 to 30 times in some of their cities...do you think they are balanced economies?
Maybe you should do some reading about the US Recession - "Big Short" is a good one...a small minority predicted the US Crisis and most people labelled them as "whingers" or "gloom merchants" but the US came crashing down, and most other major economies have - Europe, UK...Australia & China are still standing..but for how long?
realist - that seems to me a typically response from a person, who struggles to make worldwide financial, economic, social, environmental and political correlations in judging the current situation we are in – just looking into a number of positive signs - not very realistic.
Read the latest on business confidence and write out your 1000 lines once more:
"The New Zealand dollar rose to a new-post float high on speculation the domestic economy is recovering faster than the central bank had forecast, making the nation's interest rate prospects relatively more attractive.The kiwi rose as high as US83.30 cents ahead of the release of the Institute for Economic Research's quarterly business which showed optimists outnumbered pessimists in the second quarter, adding to evidence the economy is gathering pace.
The currency was recently at US83.22 cents, up from US82.95 cents yesterday.
"The data is consistent with the story of an economic recovery," said Mike Burrowes, a market strategist with bank of New Zealand".
link:
http://www.stuff.co.nz/business/market-data/currencies/5235309/Dollar-up-on-business-confidence-data
BigDaddy - as opposed to the desperate media / BNZ spin on the survey, this is what the authors actually said, which is actually quite bearish :
“Economic conditions reflect modest growth. Business confidence bounced back after the Canterbury earthquake, but there continue to be signs of economic weakness. Hiring and overtime worked fell in June. Business expectations and intentions for September have improved. But we are yet to see the catalyst that transforms this confidence into hiring and investment. Local demand has strengthened while exports have stabilised, but demand is still the biggest constraint on businesses and margins are tight. Continued deleveraging, slowing activity in Australia and a high exchange rate provide headwinds for economic growth,” said Jean-Pierre de Raad, Chief Executive at NZIER.
BigDaddy / Olly - do you want to put down 10K that Olly's prediction of rent doubling in 2-3 years (3 year limit) will come true. I can put down 10K to match. If he's right - as you are so confident of him - then you take the 10K from me. If he's wrong - as I am confident he will be - then I take the 10K from you
One wonders if Olly ever paid back the people who invested money with him in the 80's, just before he went bankrupt.
What? Olly has been wrong about the real estate market before? Badly wrong?
Oh yes.......
Or did he hide behind his limited liability company? They should make property investment a fully liable activity since it isn't actually productive.
While it would be tempting to delight as the demise of those who are greedy, I don't work that way. There is still the matter of the masses that were deceived along the way. That is the real problem and why I dismay at the whole rotten affair.
If we ever get to see a reaction as bad as the French revolution, the likes of Olly will be among first up to the chopping block. But these guys have an intellect and attention span too small to grasp that.
face it if you don't own property in the big smoke you're pretty much stuffed. Prices still tracking higher, economy picking up and the nay sayers still waiting for the sky to fall on their heads... "just wait, it'll fall... watch... now... NO now....no really now... for real, NOW!... bugger... but property will fall, sometime in the next 250 years"
and Wolly's pigs will flee the trough and fly high through the sky!!
or maybe a just plain ol' "YEAH RIGHT" should suffice!
ps Amanda... love your sense of humour, I bet you're giggling at the whingers right now!
am afarid it's were most of the work is and where most people keep coming too and were the prices of houses keep going up up up...
But I would agree with you most people even in Auckland would rather live somewhere cheaper... but you have to look at the context of my comment... I was talking about people in Auckland... It matters very little if house prices have dropped by 5% in Dunedin, when your work is in Auckland...
From Barfoots:
"Prices also eased in June compared, with the average price reaching $521,019, down 1.6% on the average price in May, and down $2,000 on the average price for June last year."
Oh ok ... also FYI, the average price is over $16,000 DOWN on June 2007 (according to the chart above)
So I guess the question the property gurus will be asking themselves is how much interest have I paid away over the past 4 years for zero (or worse) capital gain?
About the same value as this! 30% below CV.....
Yup! Because its a contagion effect. Manly is what, an hour down the freeway from the City, and apparently lots of people commute. But that's an aside. As prices fall 'on the edge' buyers look at the value/travel time/cost in Westmere, and start buying where it's cheaper. That's why Ponsonby emerged in the 70's. It was cheaper than elsewhere. Now the migration will be 'back out' to where the value is, and that will leave Westemere with less and less buyers...then prices there, will fall. Oh, and plus the fact that as many retire, they don't want to be/can't afford to be/don't need to be, in The City. 40 years ago, if you were successful or retired, you didn't live in the city! You moved out to space. That's starting to happen again.
Sounds like a lot of money...
TWO HUNDRED THOUSAND ABOVE CV... BRILLIANT!!!!!! Almost 30% ABOVE CV! Now what do the doom sayers have to say about that????
Oh that's right, the crash is going to happen "now"... "NO NOW"... "wait for it. wait for it... NOW!"
"Oh bugger... maybe now!"
Yeah right!
Ticking up, ticking up!
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.