Barfoot & Thompson say the 'average price' of all homes they sold in the Auckland market in November was a record at $627,721, a rise of $9,014 from the previous month and a massive $60,231, or 10.6%, above the price in the same month one year ago.
Barfoot sold 1,124 residential properties, compared with 1,081 in October, and 894 in November 2011.
"In the past two months we have seen house values lift to a new high water mark,” said Peter Thompson, the firm's managing director.
“For much of this year the average price moved between $580,000 and $590,000 but with two consecutive months of trading at an average price well above $600,000, the entire pricing structure has lifted."
Inventory lowest since 2003, drop out rate highest since 2004
The number of Barfoot's listings rose in November to 1,769 (October 1,645) and were 13% above the 1,562 listed in November 2011. But they only had 3,816 properties listed on their books at the end of the month, well down from the 5,046 they has in the same month a year ago. This November listing inventory was by far the lowest level for the firm for a November for at least the last twelve years.
Barfoots now has 14.8 weeks of inventory at the current selling rate, the lowest level since October 2003. Their listing drop-out rate rose however to 17.3%, its highest level since 2004. The listing drop-out rate measures the number of listings that do not sell with them.
"The driver that is causing homes values to increase so quickly is buyer demand. It has led to prices increasing across all price brackets," said Thompson.
"Telling signs that higher prices have become entrenched are the 146 homes that sold for in excess of $1 million, a quarter more than we have ever sold in one month previously, and that 43% of homes sold for less than $500,000, whereas on average the number is normally half."
Typically, the period December to April see the lowest number of listings.
“While we may see some easing of average prices during the Christmas/New Year period, during the prime summer trading months of February and March average prices are likely to return to the low $600,000s, said Thompson.
Auckland housing market 'cooled' in November, Westpac says
Meanwhile, Westpac economist Michael Gordon said the Barfoot & Thompson figures show Auckland's housing market cooled a little in November compared to a frenetic October. Gordon said seasonally adjusted sales fell 6.3% in November, though this followed a 15% rise in October. Similarly he said sales prices fell 1.1% after a 3.2% jump in October.
"This measure is not adjusted for the composition of houses being sold, so we put less weight on monthly movements," said Gordon.
Furthermore he said supply in the Auckland housing market has tightened even further.
"New listings were 2.9% higher for the month, but they have been broadly flat over the last six months, failing to match the upturn in sales over that time. As a result, the total number of listings is now equivalent to just 3.5 months' worth of sales, down from 3.7 months in October. This is the lowest ratio since December 2003," Gordon said.
"Setting aside the choppy monthly details, the housing market still appears to be in a strengthening phase. With record-low mortgage rates already clearly boosting the market, and with the Reserve Bank now obliged to monitor asset prices under its new Policy Targets Agreement, we suspect the Reserve Bank will have little enthusiasm for Official Cash Rate cuts."
(Updated with more inventory detail and Westpac comments.)
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New QV Stats - top 15 suburbs based on average house value:
1 Herne Bay $1,898,556
2 St Marys Bay $1,539,778
3 Parnell $1,301,167
4 Epsom $1,163,167
5 Stanley Point $1,141,667
6 Remuera $1,140,444
7 Takapuna $1,100,222
8 Westmere $1,073,778
9 Ponsonby $1,073,611
10 Mission Bay $1,059,444
11 Devonport $1,038,833
12 Mt Eden $999,667
13 Freemans Bay $993,333
14 Cambells Bay $973,000
15 St Heliers $960,611
.
Here is a story of a Grey Lynn villa sold last month for 1.07 mil. Grey Lynn is on no.16 with average house value 955k+ so narrowly missed out to make the top 15.
http://www.3news.co.nz/What-sort-of-house-does-1-million-buy/tabid/367/a...
Looks like Olly Newland was spot on when he predicted that house proces could double.
At this rate the average house price will be $100,000 dearer by the end of 2013 and double by 2015.
The suggested capital gains tax, or any sort of tax will accelerate the increase as it will either be added onto the price, or result in wholesale withdrawal of property off the market, thereby exacerbating the shortage.
Left wing governments have always been brilliant for property speculators.
Roll on the elections.
From the "Renegade Economist" and director of "The Four Horsemen." Best bits in the 12-30 minute range.
Property: Death Laden Asset.
"many people attached their house price to their self worth".
Three levers of the GFC: Rent Seeking, Credit Creation and Engineerd Complacency.
Rent seeking defined as: Skimming a share of the wealth created by others.
I think it is dangerous to keep reading Barfoot & Thompson stats as representative of Auckland as a whole and therefore a surrogate for the NZ Property market.
Barfoot & Thompson are Auckland's largest real estate company and sell close on 40% of all properties - that means the majority of Auckland properties are not sold by them.
Their data reports are based on average sales price - this is a very poor statistical measure for property - 1 single $10m home sold in a month can skew the average price in Auckland in Nov of this year by over $8,000 - so lets say for example if they did not sell that 1 $10m home the average price would have risen by just $1,000! - if they had reported the median price for property sales, that 1 property sale would not have impacted the median price.
The fact is a year ago just 8% of all homes sold by B&T were over $1m - this year in Nov 13% of all homes sold by them were priced at over $1m - what does that tell you about the mix of property they sell?
I wrote this article / analysis last month on just this topic when I said there is no way that the avg property price could rise by $33k in a month - I stand by that view this month. B&T need to start reporting median price stats. Tehy cna do - they just choose not to.
http://properazzi.co.nz/insights/auckland-house-prices-did-not-leap-by-…
The reinz & qv produce median stats and people read those in the media with much interest.
Barfoots have always used an 'average' because that's the way they like to do it and for them (and perhaps others) it's relevant when graphed over the long term. Barfoots tend to do things a bit differently and that;s probably how they got so big and now have the klout others aspire to.
Given entropy then I suspect its justifyable to say its not really even a zero sum game. Up until now that change is masked as long as more energy can be applied. Once you cant do that then the change has to take its cost to do from a something.
So the "winner" gets what it wants, the loser loses that plus the cost of the transfer....
"insult to injury"
regards
Richer ? I am an Aucklander but don't live there anymore. I was in an industry where there were well paid people - but nationally the incomes were much the same. What strikes me on my frequent visits is the lack of disposable cash Aucklanders have. Even well paid people hesitated to go out to dinner etc etc and etc. Vast mortgages were sucking every spare cent out of the pockets. Even just visually the place shows the signs of a cash shortage.
OK. There are about 50,000 people doing quite well. Living well along Herne Bay, and the various beaches. But you don't have to go far before you see the other 950,000 and their reality.
The reality is that compared to the rest of the country people in Auckland now are on a treadmill, which will be lifelong.
Smart money out of Auckland ? ? ? 10% year on year growth and values to double in the next few years... I'd say the smart money is in Auckland.
It's a zero sum game if you own one property, i.e. your three bed house in Remuera doubles in value, that doesn't mean you can sell and upgrade or buy two as all other properties have gone up equally in that area. If you buy two now however the capital gains on one will clear the mortgage on the other in a few years.
exactly. Fine to be a mortgage slave if you don't want to live a life. Me, I've avoided mortgage slavery and have a life, where I can enjoy travel, culture, good dining and wine, sport, of course within reason and within the confines of my income and within the context of an allowance for reasonable savings.
I believe too that by minimising mortgage slavery my family life has also been much happier and more balanced. I see so many young mothers stressing out about having to go back to work after new baby is 3 months old
That's also how you help turn a kid into a nut. It should be illegal.
Agree. Some might call me a social conservative, but I firmly believe that kids being sent off to daycare at 3 months, six months, even 1 years old is really undesirable. I cringe when I hear the attempt at justification:
"Oh but they love the social environment and they learn quicker"
I agree CTNZ that there are a lot of downstream behavioural and social problems arising from this.
Combine this with relationship breakups and I think there is a lot of damage being inflicted on children.
Well I think that "they love the social environment and they learn quicker" is actually true....
It may depend on whether its full time or not however...
http://www.dailymail.co.uk/news/article-1284413/Forget-guilt-taking-tod…
http://www.reuters.com/article/2010/05/14/us-daycare-usa-idUSTRE64D0LT2…
I think ours benefited from part time care....we didnt do full time and after hours care though, and I think that was a good call....
regards
I think it can potentially be positive for older toddlers (older than 1 year) if part time, but I don't think there is anything positive in sending 3 or 6 month year old BABIES off to half week care, let along full time care
I've heard the "socialisation and educational" line trotted out for 3 months olds, which is just farcical.
I never said that.
My argument is that the excessive cost of housing - which is partly fueled by property speculation, but is much wider than that - is having real social and economic costs, and that the government's continuing lack of urgent attention to addressing the problem is exacerbating both social and economic problems.
How about some constructive, respectful, intelligent, informed and balanced discussion for a change SK? Or is that just asking far too much?
I am very proud to say that my kids always had their mother at home for them. It wasn't always easy, but I reckon it the dividends are paying of now with trouble free transition from child to adult and good academic performances to back that up. Having been in the position to be dealing with the outcomes of other parents vacant efforts I know I made the right choices.
Think MiA. Your productive life and your retired life will be about the same length. You will hit the income cliff at about age 65 and thereafter will be standing in some qyeue hoping to get into the social housing scheme. If you are lucky enough it will still be a form of living euthanasia.
Those with assets will be swanning off to the gold coast for the winter, or if it is their taste, the shared house in the south of France.
Wrong! For most people their "productive life" will be much much longer than their retired life.
Assuming more people work to age 67-68, and life expectancy increases to say 83 in coming years, thats an average retired life of maybe 15 years. Assuming average commencement of working age is 21, then thats 46 years plus of work
Personally I'd rather have a decent productive life of 45 years and perhaps a more restrained retirement life of 15 years than the other way round
Also no one knows what life might dish up. You or me might die at aged 60, or you or me might get parkinsons at age 65, so the anticipated golden retirement doesn't eventuate.
My point is not to dismiss the importance of saving / investing for retirement, nor to promote living it up excessively during one's working,life. My point is balance, and for a lot of young Auckland mugs they don't / won't have the balance right
yes, well it doesn't matter how nice a place is if you don't have disposable income to enjoy what it offers. Sure Auckland has natural assets that can be enjoyed for free, but if you enjoy culture, dining, concerts, sports events etc. then you will need disposable income.
Look at a place like Houston. Because housing is so affordable people actually have money to spend and live a life. That has helped support the development of a vibrant cultural life.
hhhhmmmmm
Auckland's not too bad. Its certainly got a good restaurant scene, fairly average sporting scene, average cultural scene. It gets quite good musical acts, but its festival scene is lame compared to Aus cities, Adelaide's festivals are much better and a relevant comparison given the two cities are similar size
Its known as asset rich but cash (flow) poor. Its also not just Auckland, I noticed that on myself 5 years ago and determined I needed to significantly change that, I have....man life is so much more pleasant.
That has a huge knock on effect and it also means lack of resiliance. It also means that if that asset drops in value and a % of that asset isnt yours then you are commited to make up for that shortfall.....Or if some huge and un-expected bill comes in you cant meet it....
Its seems like a production system we are living "just in time".
"950,000" yes exactly....and they are the ones that even if only 5% give up will have a huge effect.....
Many ppl of course have been thinking that we are on inifinite growth. Promises from Pollies etc for generations has always been tomorrow will be better. So we've lived like it will be....that is about to come un-stuck and big time.
regards
WOW !!! I know what to do now ....
Resign my job and dump all my money into as many houses as possible.... !!!
No need to work anymore, within a year, I will make more than 10% returns...Tax Free !!!
Money for nothing !!! wonderful country New Zealand.....Thanks to Len Brown, John Key et el...
What a waste going to university and getting my now useless engineering and business degree !!!
Everyone should just realise that SK and others such as Big Daddy are in fact just Bernard getting some controversial comments in to promote the site and debate. Surely there can be no one in Auckland as greedy and gleeful at the misfortune of others as these particular commentators. Look how quick SK gets in everytime. On the other side of the coin Bernard has to be Wolly or rather Wolly has to be Bernard as he is also very quick to make silly comments.
If you think our housing shortage is something unique and why prices are rising it's the same in Aussie.
"The gap between population increase & housing supply in Australian cities is now the largest & most sustained in a century, according to a study by the federal government’s Infrastructure & Transport Department, out yesterday.
State of Australian Cities 2012 is the third annual report in a series.
It’s largely about fact rather than finding issues and deliberating on possible solutions.
However, an Australian Bureau of Statistics chart of Sydney population growth & dwelling approvals for the period 1985–2011 shows a steep rise in the city’s population until 2010, but a failure to meet housing demand from 2006 until last year".
link:
http://www.bdcentral.co.nz/afa.asp?idWebPage=8338&idBobDeyProperty_Articles=18698&SID=695194809
We are on the threshold of a major re adjustment in housing costs and those still renting will pay the price.
It's not greed when people sell their properites and buy another whatever the price. They are just swapping equities.
We are on the threshold of a major re adjustment in housing costs and those still renting will pay the price.
Rubbish. Any "major" readjustment if it occurs will be on the downside not the upside, and those renting as opposed to those highly leveraged will be well placed. I acknowledge that there may stilll be a minor / moderate upwards adjustment, but major? no way
Lack of supply in the face of rising demand only inflates bubbles, which utlimately burst when pushed to breaking point.
Olly himself warned of the bubble danger on this very website, so you need to acknowledge that side of his argument not just the "house prices will keep rising " aspect
See Olly's warning of a bubble here:
http://www.interest.co.nz/property/57122/opinion-property-market-stirs-…-
I maintain whether your talking property , TD investments, stock , currency .
Captured money is the end game. ...positions from which nearly all will be unable to execute an exit strategy.
The Central banking systems have I believe fostered a multilateral ground zero policy with it's beginings at the Fed....lower interest rates for unparalelled periods will force out stagnating funds through frustration or otherwise .....into risk options.
Property has become the best example of this in Australasia, with investors positioning themselves for better returns followed by the first home buyers living in fear of the opportunity missed......it has without productive growth, supported by energy, an end game to it.
Those not seeing the natural flow of events begining in the U.S. will be caught unawares and monies captured , losses incurred .( not just in property, but many positions of exposure)
There are any number of dots to connect and all contain unintended consequence, together with inexplicable logic or contradictions to what should make sense...but
The end game is captured money and the extraction of wealth from a global generation..or two or three or some as yet unborn.
Another dot connected splineman.....and now on to what is as good as gold.
I can see the end game, I'm still working on the why...beyond just control or the potential loss thereof....it's certainly something to do with the fiat economy lacking any real substance and a core need to find ground zero for a new beginning ..? concept..?evolution of wealth..?
Annoyingly , just when I think I've almost seen it, the unintended consequences blurr the picture again.
Very well put and similar writing to who I regard as the thinkers. Hence why, when nearing the end game I think you have to be out and early....when the sharks can exit in nano-seconds you have to work on months....
PDK seems to think we'll see inflation in hard assets, Im not so sure as I think there will be a panic as ppl exit assets when they see that what they have has in-adequate returns, that will collapse prices Otherwise maybe the wiser ones will jump in, possible except really there wont be the return on those assets, in which case really its wealth destruction en mass. Or in terms of height, a dwarf amongst ants scenario...
"risk options" The Fed with the low rates its forced to run in effect is pushing the greedies out into equities and indeed anything else. The Fed is really priming like crazy but getting no traction....that should be telling us something is fundimentally different.
Global generation and servitude, well I think global is going bye bye. At some stage Greece, Ireland etc will simply see that default is far easier and less painful than generations of servitude. The only "fear" stopping them is to be cut off from the global markets. When the global markets are no longer viable or worth it then its bye bye.
Growth, to stand a chance of fixing this has to be 5% but that has to be "supported by energy" it isnt there...worse we are going to have less....so anti-growth.
Hence the end game has to be, mass default. The only thing of real interest is when will it be NZ's turn.
regards
If I recall correctly it was hundreds and not thousands and it was a reference to a lot of landlords struggling to get tenants and it was common theme especially in the smaller cities then. Being delusional is not one of the seven serious sins. But being greedy CM is. I hope you go to confession regularly.
Oh dear, if I remembered correctly you were raving on about how much money you are making out of shares trading.. but anyhow, greed is good, according Gordon.
Me, I've done my dash and sold off Auckland.. but I wish I could hold off a few months, then we could be almost mortgage free here in Aust..
It's great, except yesterday Brisbane hit 39C heat and no wind, today is much better.
I was in Auckland last week - just to see if my old parents home is worth selling, love the cooler temp but I never realise how expensive auckland is. Little bit of shopping at Count Down and 80 dollars later. Fill up the old Nissan Maxima elcheapo rental car $121.. ouch.. Noticed quite a few beggars in Queens street - sign of the time I guess.
what I would like done is for this frickin useless govt to actually do something meaningful to address the cost of living, starting with addressing housing. It's not just a social issue. High cost of living equals less disposable income equals less consumer spending. Even if the Nats didn't care about social issues then I would have thought they would have cared about economic ones.
They are the most incompetent bunch of pollies I can remember. Mr Key seems obsessed with being Mr Popularity and as a result focusses on the short term to the detriment of the mid to long term. Witness his statements about supernannuation age, and housing.
As much as I like Aus, it pisses me off that one of the key reasons I left the country I love was because of the cost of housing, which could have been addressed years ago. The high cost of groceries, fuel and power might be tolerable if housing was affordable.
you always exaggerate CM which shows your memory is selective and or poor. Never trade, never rave. Just accumulate quality dividend paying shares. I see your interest rate went down yesterday in Australia. Pity you shifted there when it is going backwards economically. You should have stayed in Auckland where life is so good if you dont go to work, you stay indoors out of the rain and you cannot be burgled if you are at home.
I think the NZ economy is about a year ahead in the property upswing ahead of Australia. In Melbourne on the outer suburbs you can buy a 4 bedroom brick house with swimming pool for $330,000. Now that Australia is dropping rates expect the same upswing in house prices over the ditch as to what we have experienced in the last 12 months. In Noosa a 1 bedroom apartment right on best part of the beach 10 years ago cost $900,000. Today you can snap it up for $1.2 million (only a $300,000 increase over 10 years -bargin).Everything goes in cycles. There is only so much that prices can come down due to the cost per square foot to build a house in the first place. As you all know new builds are a fair bit more expensive than old built houses so the difference between old and new needs to catch up. Growing population and desirable locations will always hold value.
I think property will tick up in Aus but not as much as Auckland has witnessed. In NZ property investment has concentrated in Auckland, in Aus any increased property speculation is likely to be more balanced across a number of cities. In addition, Aus's planning and construction sector, except perhaps in Sydney, is better able to respond to an uptick in demand. Furthermore, Aus has tigher controls on foreign property investment.
He is a funny man who thinks most people have over 50 investment properties like him to play around with...abit like me where I think 80% of Auckland population live in city fringe suburbs just because I live in one - I know it's naive but I have to say he did carry his point across quite well for like minded people - bit silly I know.
With the RBA yesterday reducing local interest rates to 2009 levels, because they are in the crap now the resource boom has peaked?
And plus you believe it's time to spend more on already overpriced AK houses here?
Best of british luck.
Au is one of largest destination of NZ exports, and yet they have real problems.
Think i might buy some popcorn and watch this unfolding show over the next few months.
Should be entertaining.
i remember when i moved to auckland 13 years ago, this old dutch guy telling me that central auckland property prices would double every 7 years. I thought he had rocks in his head!
Looks like the old fella wont be far out!! Can it keep going? I have my doubts..... but then I had my doubts 13 years ago too.
Considering NZ housing is globally considered ``severely unaffordable´´ I´m thinking this is a bubble, supported by a small percentage of Kiwis who may enjoy higher incomes (the 1%), a housing shortage, low interest rates and perhaps overseas buyers seeking a place to put their money. How long can it last? Can prices continue to increase against low wages, job growth, and falling exports? It all sounds completely wrong to me.
Yes, I'm tired of living in rubbish housing.
These tract boxes in the car-needing urban sprawl, mostly don't face North.
They lack solar gain and appropriately-sited thermal mass.
They're built of rubbish pine, with flimsy battens on the outside, an extra covering actually for asses, but somehow it ended up on walls.
They're serviced by fossil oil - water-pipes, sewers, roads - so maintenance is going to be increasingly questionable.
They often don't have enough bare-land space, to grow either food of children,
I'd be keen to find out more about sustainable housing options, especially cheap ones.
What would you like New Zealand’s population to be by 2060?
13450–13500 votes
5 million 24%
10 million 24%
15 million 9%
As many as possible. 7%
No more – we’ve got enough. 36%
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10847678
that’s 60% wanting 5 million or less (now at 4,448,294 ). Also “80% of our population growth in the last couple of decades has been the net inflow of non NZ citizens”…. so people who grew up and adapted to big cities are having a say over native born New Zealanders.
http://www.treasury.govt.nz/downloads/pdfs/mi-jarrett-comm.pdf
There is/ has been massive lobbying for more immigration from the vested interests (according to Gareth Morgan).
With regard the urban fringe not every farmer will want to sell; I recall William Rees who settled at Queenstown was given $10,000 for his run when gold was discovered but didn't want the money, he just wanted to continue farming...
.....
with regard to Hughes (user pay) MUD financing of infrastructure model, it is suggested that this will lower the upfront cost . The problem is that we are no longer protected from world property prices and while Chinese elites will be able to afford gold plated infrastructure the wages of the average New Zealander will mean that they can only afford an open drain and drum for doing poo?.
You can squeeze efficiencies out of the system but real resources are saying: "gotcha!" (I think?).
Everyone has forgotton that the Auckland Council has a new Unitary Plan it will announce shortly where zones will be changed to to become 2-4 times more dense than at present.
This is to stop Auckland spreading all the way to Wellington and using exisiting infrastructure rather than creating a new one.
Soon where there is one house on a 600M2 section, there will be three houses on 200M2.
or 4 stories where one there was one.
Guess what that does to land prices and why the more savvy are buying up big now?
read
http://www.aucklandcouncil.govt.nz/EN/planspoliciesprojects/plansstrateg...
The free marketers like to trumpet how it is the developer who knows best about urban design yet back in the 80s I heard for the first time (in Christchurch): "the thing to do is buy a corner section and cross lease it them sell the old house off (after you or a relative has lived in it for 6 months). Note it wasn't anything to do with the ambience of the urban surroundings and the developer rarely wanted to stay there, themselves. Many of these infills really scraped the bottom of the barrell.
Like all successful cities across the world, Auckland is growing.
Bogata was doing well untill I last checked and it's success (population growth) was strangling all the good work the mayor had done.
This brings challenges (such as where everyone will live and work), as well as great opportunities,
for Asian realestate agents, Olly Newland types etc (it's all about them)
as we use this growth to help us achieve our vision of becoming the world’s most liveable city.
the Mercer liveability indexes are for mercheant bankers on transfer, people who live in the top 10% of locations and locale.
We need to protect and enhance what already makes our region great, while facing up to what’s needed to make it even better.
if there was a reductuion in quality of life the PR screen would obliterate it from public expression.
...mmmmm sitting on hill smoking peace pipe ...looking at all this from above...seems to me that the only people gaining (materially) are the "traders" ...just like dark days when million buffalo roamed prairie and traders ...white men, yellow men mmmm all the same to me..... one rifle, 2 blankets and a box of firecrackers for mmmmm million acres of land ..... then sell land ...smaller parcels to other traders ...smaller parcels to smaller traders and so it goes ..... mmmm ...after all big Chief White Cloud says... "you can only wear one pair shoes...ride one horse...live one teepee ... only eat certain amount a day" ....meaningless .....mmmm ..almost forgot the "ticket clippers" clipping the sheep as they stroll past ....oblivious to it all .......... mmmm
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