Both the the median and average price of homes sold by Barfoot & Thompson hit an all time high last month with the volume of homes the agency sold also surging.
Barfoot's median selling price was $691,500 in November up $36,500, or 5.6%, from $655,000 in October, which was the previous record median. November's average price was $756,909, up 2.8% compared to October's average price, and up 10.6% on November last year.
The agency, which operates exclusively in the Auckland and Northland regions where it is the biggest player by far, handling more than a third of all residential property sales, sold 1,105 homes in November. That was up 166, or 17.7%, from 939 in October, but down 13, or 1.2%, from 1,118 in November last year.
"November is normally one of the strongest sales months of the year and has proved to be again this year," Barfoot & Thompson managing director Peter Thompson said.
"Attendance at auctions was extremely high, there was keen buyer interest and new listings were strong."
Thompson said demand for properties at the top end of the market was particularly strong and the agency sold 225 homes for more than $1 million in November, only the second time it had sold more than 200 homes for more than a million in a single month.
Sales of million dollar-plus properties were up about a third on this time last year, Thompson said.
There had also been an increase in the number of new listings that the agency had signed up, with 1,693 homes being listed for sale in November, a 20.7% increase on the average number of new listings over the previous three months.
Only 225 (20.4%) of the homes the agency sold in November were priced under $500,000.
Westpac sees more chance of a tightening than loosening of macro-prudential policy
Westpac senior economist Michael Gordon said in a First Impressions note about Barfoot's figures, that the chances of the Reserve Bank removing high loan-to-value ratio (LVR) residential mortgage restrictions were looking increasingly dim.
"In fact the greater risk is that the next move is a tightening, rather than a loosening of macro-prudential policy," he said.
Refer to the charts below for detailed data about Barfoot's sales.
Barfoot Auckland
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34 Comments
If prices are up 10.6% on a year ago could we see perhaps a 15% surge in Auckland house prices over the next 12 months? Record net migration, interest rates now heading down, Europe and USA looking like moving into a deflationary period, oil price heading south therefore NZ CPI likely to drop. C'mon Wheeler give the market a Christmas present cut the OCR mate!
Well he can't put it up, that would increase the price of the NZ dollar. He's already intdroduced LVR restrictions. He's only got two tools left in his tool belt:
** More hot air about rising interest rates ( but I doubt anyone is listening at the moment )
** Ban TV programmes lie the block hyping everyone up.
Here's a press release from Labour leader Andrew Little;
If John Key is serious about tackling the housing crisis he should adopt moves by Australia’s Parliament to crack down on overseas speculators who are driving up prices, Labour Leader Andrew Little says.
“Australia already has a ban on foreign home buyers but a new report by the Australian Parliament recommended establishing a register that records the citizenship and residence of home buyers as well as tougher penalties for avoidance.
“Australia is doing what it can to keep the dreams of first home buyers alive. That is a huge contrast to here in New Zealand where the Government refuses to acknowledge there is a problem and won’t even collect the data on foreign home sales.
“My position on foreign buyers is clear. If you want to live here, you can buy a home here. The Kiwi home ownership dream isn’t a speculator’s plaything.
“The average house in Auckland earned more money last year than the average worker. That’s ridiculous.
“The Government has failed to fix the housing crisis and first home buyers are bearing the brunt of it with LVR mortgage restrictions and a massive shortage of affordable homes.
“If Australia can do it, so can we. It’s time National got stuck in and sorted the mess out,” Andrew Little says.
As far as I know - in the absence of an illegal cartel - speculators can't drive prices up. All they can do is hurry price rises along a little faster. If there is a top to the AKL housing market speculators will bid prices up there sooner rather than later but when we find that top then we will also find the speculators will melt like snow on the water.
Bit disappointing this statement from Little. Populist but then so is Winston Peters. I had hoped Little was getting better advice on housing by now. Oh well.
Did you read the comment last week from Real-Me? who works in the rates department of the Auckland City Council where he/she sees the rates payments coming across his/her desk, a single payment from any one payer covering up to 10 to 15 properties, where invariably the payer has an asian name
"Invariably Asian"... Funny only a couple of days ago some accountant with a clear Anglo Saxon name posted here that quite a few of his staff and himself have made millions from property investment, one of them under the age of 30. Well I guess all from less than "up to 10 to 15 properties".
In the end all speculation is is arbitrage between where an asset price is now and where the speculator thinks it will end up. I accept speculators might add some momentum and there might be overshoot but overseas buyers are not the cause of the problem in AKL. Like landbankers they are a symptom.
If Little really wants to tackle affordable housing he should go after the root causes.
Agreed - treat the casue, not the symptoms.
Labour are missing a trick here. They could be the party for the younger generations and all businesses (that are not speculative) by coming out against land supply. Houses would become more affordable (even for existing homeowners when they trade up) and capital could be put to more productive use.
Um... we are talking about residences not bare land aren't we?
So every overseas buyer would have to agree with every other overseas buyer not to sell the 20,000-odd dwellings they would need to take off the Auckland market to artificially raise the price of properties. How does a deliberate attempt to corner a market work out? Check here
As opposed to the simple explanation that everyone knows that a lack of supply of new homes will push the prices up anyway and they are happy - without any form of collusion - to go along for the ride.
the dont need to colude, they just have to not sell at a loss.
and its not a matter of buying everything, its about not having to release the land they have.
as for the buildings, that's just something that happens to be there at the time. If your accountant, your lawyer and your agent tell you it's worth X, then you buy and hold until you get it. Since they're all following the same expert advice, it comes true.
I would tend to disagree on that. ie no formal cartel is needed if you understand the market and ask the top dollar. Specualtors, will run, yes sure trouble is the FHB's with their 95% LVRs will be left high and dry.
Personally overall I like his statement, but there you go, and actually the advice if tahts what it is seems fine to me.
regards
I thought I was talking about fundamental causes. I have often said that an oligopoly exists and no formal cartel is needed. But only because the market is already dysfunctional.
If supply of new houses met the demand there would be no money in landbanking or speculating. For an NZer or an overseas "investor" its like buying a Lotto ticket when you already know the winning numbers. Auckland Council and the government will do anything except enable enough land to come onto the market to meet demand. In those circumstances it's money for free if you already have some spare to buy property in AKL.
Auckland is already about 20,000 dwellings behind demand. What will clear that backlog? The following is a list of fixes that won't make much difference:
- restricting immigration
- LVR restrictions
- Gutting the RMA
- restricting overseas buyers
- playing with the OCR
- Special Housing Areas'
- Commissions of Inquiry into the building industry
- Firing half the staff of Auckalnd Council (no matter how good it feels)
if supply meets demand then there is money in landbanking because that (or before) is when you get in. There is no money in landbanking when the market is growing slowly, because your opportunity cost is equivalent to the inflation/rollover cost.
If supply meets demand, then it shows there is demand, and thus going to be increasing scarcity, which is more demand.
A housing surplus, remember, means more land is being bought for more houses.
- -
and which half?
Fix the supply problem and the overseas speculators will disappear too.
Right now, you can invest several million into the market and look to double your money in a few years. That looks rather tempting to a foreigner wanting to stash thier offshore funds.
Fix supply and housing will produce inflation-only capital gains and a 5% income after tax and fees. This is not so appealing unless you are investing for income in the long term (hint: these are the kind of investors that you want to attract)
Australia only bans foreigners from buying existing homes, they can only buy new builds (NZ'ers exempted). But even that would be a good simple first step here- won't happen tho, the post Brash RBNZ has spent years organizing the NZ financial system to suit land agents and fontera.
the stronger the fall.
PMI global wide contracting, growth weak despite massive injections in the economy (QE). Salaries not increasing at the same pace as productivity (while others are overpaid taking advantage of it). China's demand contracting and bubble about to burst. Global bonds bubble, stock market overpriced (thanks to the QE that goes to speculative economy rather than productive economy).
..yet many seem to think that we can all be richer by selling houses to each other because house prices increase 10-12% a year, and the only concern seems to be able to take on the next mortgage, to "afford" a mortgage, not the overpriced asset itself..
Well, good luck to everyone. My choice will remain being loan-free, encouraging higher OCR and opposing any rescue to all the people that will loose their overpriced assets after betting, risking and loosing.
Enjoy it while it lasts, but it's not very difficult to know what will happen. I wish I could also know the "when".
PS: There are lately concerning things in the world, countries moving towards accumulating gold. The first country being able to back its currency with gold might become the global boss and its currency the global reference.
http://rbth.com/business/2014/08/20/russia_overtakes_china_to_become_wo…
....gold I dunno. Bitcoin perhaps
http://www.telegraph.co.uk/technology/news/11138581/Bitcoin-will-become-the-new-gold.html
“If we’re honest with ourselves all money is based on faith, all the way from gold to pounds sterling. We accept it and store it because we have a belief that someone else will accept it in transactional trades. If you look at gold less than 5pc is its intrinsic value for gold, for jewellery. The other 95pc is its value in monetary exchange.”
The "problem" with BitCoin is that there is no central bank controlling it.
And that's quite important for a country, to control its currency.
Money is based on faith, which is not bad per se as long as it keeps matching requirements:
- transportable
- difficult to copy it
- deposit of value
- globally accepted
The problem is that this faith could decrease if people start seeing that money is printed continuously without benefits in productive economy and their lives and its "deposit of value" factor may collapse suddenly.
In a normal scenario that doesn't happen, but we are not in a normal scenario and the only way debt will be able to be paid is through monetary policies (inflation), because it's already a fact that productivity does not increase at the expected pace and the growth we're experiencing is not real growth but debt-based growth which won't solve debt problem.
So either inflation is created and we all carry on with Business As Usual facing the risk of loosing faith in the currency and collapsing like the Roman Civilization collapsed, or some countries decide to turn the page and start backing up their currencies with something more trustworthy than "faith" and making its currency the global reference that guarantees stability to investors.
We're living the times were something big is about to happen. Just waiting for the thing that will trigger it (US stockmarket crash? Bonds bubble burst? Russia and China VS USA and Saudi Arabia?)
that might be the solution rather then the problem? I havent had a chance yet but I hear he's worth a listen..
https://www.singularityweblog.com/andreas-antonopoulos-on-bitcoin/
Bitcoin took a massive hit when the tax departments in major countries declared it was a "value asset" and thus taxable at it's balance day exchange rate, and transactional profits to also be taxable (and declarable- for record proving).
The ability for a non-nationalised currency to be free of theft from government was it's second biggest advantage (privacy of transactions was its first). Now that governments are free to steal peoples' property based on there BTC holdings, and it's exchange movement, it halved in value.
I think this and forced down low interest rates had something to do with it too.
http://en.wikipedia.org/wiki/Leverage_%28finance%29
The mere fact that it involves stealing from peter to fund paul is not widely
recognised.
The mere fact that the thieves never were and still not the crime of the century is one for the guiness book of records.
The mere fact that a whole raft of people, including our Government are colluding in the ponzi game is political dynamite.
Rigged betting is a crime.
I also thought theft was also a crime, particularly from the old, senile and financially dependant savers who did nothing wrong, except to trust others.
In God we trust, all others should use cash, not credit, nor QE..
Those old ppl effectively used up the planet by over-consuming and over-breeding, so they did plenty wrong. The lucky ones will be dead before the reckoning.
Oh and they are not savers as they are by and large not saving but are the saved, or de-saving as they spend down their ill-gooten gains in retirement.
regards
Not all elderly were consumed by consumerism, like today.
Not all had it easy to borrow at 17+ % on one income. And you had to have cash as a deposit and mostly had to borrow from solicitors, looking after the cash of others, who had made work pay.
It is all relative, they did not choose to live longer than their forebears.
They did save however, for their old age. No QE then, you may not realise.
No thieves in Finance houses, plundering, either.
No point in going over ancient times.
The point today is that credit should be given, where credit is due.
And I do not mean to filthy bankers and landbankers and real estate agents and yes, those same solicitors, who know how to charge like a wounded bull, all creaming a little off the top..
credit where credit is due. 17% on $10,000 is $1700. and being able to do home renovations, walk to work, and grow own gorceries makes a difference - every $10 is $1.70 less interest.
7% of $350,000 is $24,500 (and government takes big chunks of tax for gst & paye & other stuff , cs , petrol levies, road user charges, acc, to pay on top of that 24,500 of disposable.
every $1000 is $70 less in interest... leaving only 23,800 to pay... home renovations are expensive, complex and many are licensed, walking to work...if you can will save you sod all, and growing your own groceries will probably cost you more in wasted time and effort than you'll save financially.
5% inflation on 10000 = 500
1.5% inflation on 350000 = 5250 the amount your money devalues and requires extra each year.
10,000 at $20/wk = 9.6 years (principal)
350,000 over 9.6 years would require $700 a week (principal, ex interest)
So credit where credit is due, those who got in early to property 30 , 50 years ago, are really sitting on some sweet capital gain, and have massive advantage over those who have to pay all those years of compounded investment and inflation - AND what really bugs me - their job market was simple to get into, a few basic skills and a half decent attitude you were made. these days it's a huge task to get anywhere and the demands are as much as they were 50years ago, not the easy 30years go stuff , and when I was trying to get a job (80's, 90's) job and career security was a joke. So making sure you've got that $1000wk available to pay the mortgage for 10 years...... hmph
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