Spring is late arriving in the Auckland real estate market, according to the region's largest real estate agency Barfoot & Thompson.
The company sold 1051 homes in September, little changed from the 1003 it sold in August and well down on the 1358 it sold in September last year.
The median price of homes sold was $850,000, unchanged from August's all time high but up $60,000 on September last year.
However, the average selling price improved slightly from $906,560 in August to $919,849 in September.
The housing market traditionally starts to pick up in September after its usual winter lull, but this year's slow start in Auckland may be set to continue for a while at least, with Barfoots newly listing just 1536 homes for sale in September down 10% compared with the 1706 new listings in August and down 20.8% compared to the 1940 newly listed in September last year.
"With the arrival of spring, housing activity usually lifts but it has not been the case this year," Barfoot & Thompson managing director Peter Thompson said.
"Rather, the market continued the trend which first showed in July of prices increasing at a much slower rate than in the past two to three years.
"Compared to what was happening to prices last September, the Auckland housing market is subdued and we are now looking at a totally different market to 12 months ago."
However, Thompson said at the top end of the market had not been affected by the more restrained market mood, with 404 properties selling for $1 million or more, accounting for 38.3% of the agency's sales in September, while just 7.7% of sales were for less than $500,000.
That may explain why the average price increased in September while the median price did not.
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23 Comments
About time it "cooled " .
The harsh reality is that there is much evidence to suggest house prices have become so disjointed with the underlying or intrinsic value of the land and leaky structures on them , that there has to be an endgame where the market recognises a price ceiling .
"Secondhand" house prices have been tracking the costs of newly built houses , but the new stuff is way out of control with twenty-something year old chippies earning more than Doctors , and the 3 legged building material supply cartel having pushed the envelope too far .
Prices for new builds per square metre have now reached as much as " from" $11,000 per square metre for an apartment to be built . This is more than Hong Kong , Singapore or even Sydney
The net result is that new builds are starting to see some resistance, and this will feed through to the "used" house prices in due course .
The other issue is the Banks , who by now must have realised they are lending in dangerous territory , and are likely to enter a cycle of caution in lending practices
rubbish! Auckland can go onwards and upwards.
With 100K+ immigrants, record low and going lower interest rate, half of china and India wants to live in nz, and a chronic shortage of land, auckland can only go up. This is just incorrect data coming from B&T. The auction rooms are full of Chinese bidding over each other for 1M+ properties.
This is just misleading information as to what's really happening in the real world to try to trick property owners to sell.
Agree the fundamentals are crazy.
Reports show the debt ponzi has been temporarily shut out of Auckland, but are discovering everywhere else. Kiri Barfoot recently stated at her investor function that investment returns were "3% if you were lucky, so thank god for capital gains". Tony Alexander reported at Kiri's party that PIs always overestimate regional growth each property cycle, and that now would be no different. He also stated that the biggest constraint moving forward would be further finance restrictions, with no 2nd tier finance company's covering the gap because most of them are toast. The new ones are heavily constrained by new tougher regulations, and rightly so.
Consider then for a moment, no more or heavily reduced speculative capital gains, add in a pinch of proposed debt to income lending rules and a dose of Phil Goff’s proposed Vancouver tax, all served with a side of Winston and Trump. Yet the ponzi continues to act like self-medicating junkies on leveraged debt....wow.
That seems to be a contributor to the stall. People dont want to be locked out of the market by selling and there being nothing to buy, banks aren't letting people bridge. I was told that if you are in a position to buy you can get a good deal at the moment. Bizarre when there is a shortage. A shortage of property but a shortage of funding.
Not so bizarre. Most have continually spruiked the theory that shortages must cause price rises. They continually miss a most defining factor - which is the ability to pay. Thus the housing shortage may continue, but if the cash aint there, prices can reset to much lower levels.
Is the tide going out..fonterror payouts? Foreign buyers? Interest hikes? LVR's? Nervous banks? Change of tax laws? Who knows...but there are some swans about...
OK so inventory is low, interest rates at record lows, net migration high, not enough new house supply, so why has the market stalled? Where have all the Chinese buyers gone - the North Shore was their main feeding ground. Might have to drop into Barfoots auctions at Bruce Mason Centre tomorrow and see if the room is empty.
Last week Barfoots only sold 50 of the 150 auctions offered across the Auckland region so surely inventory
must build up rapidly unless homes are simply removed from the market if unsold.
Banks might have to have a spring mortgage war to create some more activity.
I bet the banks are still lending to investors at DTIs>5, and still lending to investors where financing costs exceed rental income, and still borrowing from overseas to make the ponzii work, at least for the time being.
Bank directors will be highly exposed to challenge when the first OBR is applied to their depositors, the banks record of lending up to July this year has been reckless: e.g. see lending to investors where more more than 50% of lending was done at a DTI greater than 5. Madness, when applied to a market with very low elasticity of supply.
The requirement to have a 40% per cent deposit is certainly starting to affect sales to speculators in Auckland. Now that the USA and Europe are looking to increase their interest rates It will in turn drop the NZ dollar against overseas currencies and in due course allow the Reserve Bank to increase rates here when required. So many people forget our interest rates in NZ are at historic lows and that the Reserve Bank only put them in place to keep the place going. At some point in time they will move up again.
Withdrawn usually indicates during the pre-auction marketing period there were no expressions of interest, no attendees at the open home sessions. No access arranged for engineers reports or valuations. In other words no interest at all. So, with no known bidders, no point in proceeding, so it is withdrawn prior to auction
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