Residential property sales volumes and average selling prices both rose at Barfoot & Thompson in October, auguring well for the summer selling season.
The agency, which is the largest in the Auckland region, sold 884 residential properties in October, up 22% compared to September and up 39% compared to October last year.
It was the highest number of sales the agency has made in the month of October since 2015.
Prices were also up, with the average selling price in October hitting $937,277, the highest it has been since December last year, while the median price rose to $860,000, the highest it has been since March this year.
There was also a huge surge in new listings with Barfoots signing up 2046 new residential properties in October, which was the highest number of new listings signed up in the month of October since 2003.
That pushed the total number of homes Barfoots has available for sale to 4848, the highest it has been in any month of the year since February 2012 and the highest it has been in the month of October since since 2011.
So buyers will have plenty of choice heading into summer.
"Spring arrived and the market came alive," Barfoot & Thompson Managing Director Peter Thompson said.
He said the increase in prices could be partly attributed to the traditional spring upturn, but there was also a new found confidence that prices were not going to retreat.
That encouraged buyers to put aside their concerns of the last few months and proceed with their buying intentions.
However he also warned that it was not the start of another boom.
"The revival of the Auckland housing market is not a signal that the market is ready for another burst of rising prices," he said.
"What it does signal is that residential property is set for strong trading through to Christmas."
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114 Comments
Thank all those FBs. .
Get back to reality. ..https://www.oneroof.co.nz/news/35592/?ref=nzhhome
Here's the reality of the B & T sales and Listngs numbers showing a failure rate of 40.3% of all listings since March 1st.
Barfoot & Thompson Figures.
March 1689 new listings, 1064 sales
April 1358 new listings, 731 sales
May 1455 new listings, 1027 sales
June 1210 new listings, 903 sales
July 1057 new listings, 830 sales
August 1331 new listings, 795 sales.
September 1709 listings, 722 sales
October 2046 Listings, 884 sales
So 11,855 New Listings since March 1st and Sales of 6956
Total stock at end of Feb = 4648 Total Stock at end of October = 4848.
So stock that's been available since March 1st = 11,855 - 200 (difference between total stock at end of Feb to today) = 11,655 Total New Listings available.
6956 Sales / 11,655 Total available stock = 59.7% sales rate. Or 40.3% of the market is failing to sell and being withdrawn from sale. That's an expensive marketing adventure for all the failures!
There is no housing shortage there are empty houses all over Auckland, loaded with speculative debt from our banks and the Chinese banks with very few people still foolish enough to buy them.
I've analysed these "Fail Rates" right back to when B&T first started reporting their Monthly Stats (Jan-15).
I took a rolling 12 month average (last twelve months - "LTM") of "fail rates" to eliminate any seasonality.
LTM fail rates held steady at ~32-34% from January 2016 - April 2017.
Then the LTM fail rates skyrocketed to 45% in October 2017 - it really was a massive movement in a short space of time.
This coincided with LTM median prices stagnating at ~$850k
LTM fail rates peaked at 48% in February 2018. So almost half of all listings were not resulting in a sale.
Updating for today's release, the October 2018 LTM fail rate sits at 42.0%.
LTM median prices have slowly drifted down to $832k from $850k (April 2017).
So what you say?
I don't have the data going back, but if you assume that 30% LTM fail rate is "equilibrium" (i.e. the stable "failure" rate in 2016) then more sellers are pulling listings than should be the case in a "normal" environment.
Presumably the listings are failing because of an expectation gap - Vendors aren't attracting the prices they expect so they hold the property rather than sell.
Fine, but there are some vendors that are forced to sell due to circumstance (moving overseas / moving into retirement villages or care). These vendors become the marginal prices setters in this market - and that is why prices have been drifting down - they are forced to meet the market.
Now, if more vendors come to the reality that 2016 prices no longer exist (i.e. accept prices offered and therefore fail rates tend closer to equilibrium) we could see an acceleration of that downward drift in prices... which then may attract more sellers as you see the "FONGO" behaviours set in...
https://www.domain.com.au/money-markets/fomo-to-become-fongo-in-a-falli…
I’m going to give this one to the bulls on points but....
Those inventory numbers are a worry - sell 800 add 2000. Now, maybe November will catch up a bit. Trademe has been pretty flat lately and I’m feeling good about my bet with Nic. So we just have to wait I guess.
The FBB came into effect late this month. If FBs are a major presence in the market you’d expect a rush. So the gains may be indicative of that and may have robbed future months of sales.
Hardly
Looking forward to taking your $10 off you. There are 'shed loads' (pardon the pun, but that's how bad some of our new Shanty Towns are in terms of build quality) that will come on stream between now and Christmas and the sales rate post FBB has had a cardiac event, so the stock just piles up. Already up to 13,828 since the earlier post. May get to 15,000 before the end of November. FONGO is about to become an infectious disease..
Hi Nic Johnson,
With regard to rentals, let's be perfectly honest.......
Rentals always empty out at this time of the year, as students etc start heading home for the summer recess......
Then from mid-January it's the opposite and there becomes a dire shortage of rental accommodation - as renters compete en-masse to sort out their digs for the year ahead.
This seasonal effect is well recognised and well-documented. Every landlord, tenant, property manager etc is well aware of it - and if not they soon learn!
TTP
Seems the government plan to keep Auckland house prices going up is working. Got to keep those new residents flowing in. Politicians do like to keep the "donations" coming. You can see why the parties fight so hard to be in power and receive the "goodwill payments". Just need to be part of the organisation that benefits, you don't need it paid directly, that would be corruption.
Lots of noise about reducing immigration, but not much action. Now why is that? Be interesting to see if the foreign buyer ban has any effect or if it easy to get around it.
Hi Rick,
I think it's Crash-Crusader (aka Retired-Poppy) who's going to need a (double) single malt when he finally wakes up and visits here today......... (-;
Let's face it, things have hardly been going well for him over recent months (or should I say years?)
TTP
18 houses in the first year is not actually that, er, very many. Bit like the Christchurch rebuild. Still fewer houses than needed to house the new residents. Let me see now, 60,000 divided by 18, why that's 3333 per house. Still, National would have been worse. They don't even seem to have admitted they stuffed up.
Wasn't there some loose talk about affordable houses at one point? Presumably even Fletcher Building could build expensive ones, then again, perhaps not. I guess if there are 3333 people per house they can afford them.
The denial from many commenters of more houses sold and higher prices is just incredible. Yes there is more stock for sale, maybe there was some rush from FB buying before the ban, maybe November volumes and prices will be down but just accept the hard figures that B&T sold a lot more houses and that prices were up in October.
I believe this data includes all of B&T's sales, so unless they've expanded their reach in the last month then I think the data is comparable.
As always, the reported data and more can be found on the B&T website (the only place to go for cherry picking statistically insignificant comparisons)
https://www.barfoot.co.nz/market-reports/2018/october/residential-sales…
Where the DGM has always been wrong is in its assumption that in a flat/soft housing market prices must fall.
Clearly, that's fallacious reasoning.
When housing market activity weakens people tend to avoid selling - and prices become "sticky-down".
This effect has been clearly illustrated over the last two years - particularly in Auckland. Sales volumes have slipped back - but prices have held pretty firm overall.
Inevitably, the housing market has proven far more resilient than the DGM ever dared contemplate.
TTP
"Sticky down" until, at some point (which differs for each person), reality bites and FONGO sets in...
First will be people who are forced to sell due to circumstance - they will execute sales regardless, setting the marginal drift down....
Then it will be the anxious-and-over-leveraged...
Then.... ???
Even during the boom listings were significantly higher than sales in October:
https://www.barfoot.co.nz/market-reports/2015/october/market-update
October 2015, 1820 listings, 1068 sales. Presumably some is seasonal, some just represents the fact that not everyone who lists goes through with the sale for a variety of reasons.
There may be something interesting in this data, but you'd have to look at the trend rather than simply quoting two numbers.
Who do I believe
You really need to learn what a quote is.. the word "surged" doesn't appear on that webpage anywhere. and the headline is just RE spin.
"The figures come as Auckland's biggest real estate agency, Barfoot and Thompson, revealed that [average] Auckland house sale prices in October hit a new agency high for the year, at $937,277."
Heres an actual quote:
While October's average sale price set a record for 2018, it is still below those notched up in 2017. The highest average sale price recorded by Barfoot & Thompson was $968,570 in March last year.
.
With low auction clearance rates and a bulging inventory (trade me closing in on 13000), I'm inclined to see this month as an anomaly.
Even though volumes have increased it is still the 3rd lowest volume sold for an October since 2012 and that includes the rush prior to the FBB.
Mr Thompson and the Property Bulls may well be popping champagne and cockahoot about this result but their party could be short lived.
I wouldn't be surprised to see sales volumes and prices plunge again next month.
Also in this type of market it can be more about what cant be sold rather than what is selling. Good quality homes can still sell to cashed up buyers. But who is going to buy all the overvalued junk that is now flooding the market???
Remember (in Auckland) that a household on a median income of $130k can only borrow 4.5X that, in current conditions, so need a massive deposit to buy a median priced home.
Pressure will continue to build and that's why the inventories are bloating.
Alex, what you've just said is very logical and, to anyone that does a little bit of research, quite obvious. However, as you are probably about to find out, this is among the most controversial things you could have possibly posted here. Sadly this site's comment section has become riddled with conspiratorial doom and gloom merchants.
A housing market that is affordable to its citizens isn't "doom and gloom".
These "cycles" of which you speak, do you think there are any influences that have changed between this one and the last? Have we seen anything that is outside the norm? Credit rates? Availability of debt? Changes in lending? External influences that weren't seen prior? Internal influences that weren't evident before? Changes of government? State of the economy? State of our trading partners' economies? State of the global economy? Any changes that have happened to other similar property markets?
There has been nothing "normal" about this "cycle". There will be nothing "normal" about its correction.
It appears to have been on the market at $869k back in January with Harcourts, and Bayleys had it listed at some stage too.. so after 9 months they may have just taken what they could get.
"WAIMAUKU - 303 School Road
Paradise Priced Right! - Urgent Sale!
Sellers have moved on and are ready to meet the market..."
https://www.facebook.com/NthwestLife/videos/1430123317102525/
http://nz.speakingsame.com/p.php?q=Waimauku,%20Rodney,%20Auckland&id=31…
Umm...is it just me or do some of the numbers seem exactly the same as last month (i.e. the report is not updated). For example the volume of sales in West Auckland was 131 in Sep 2018 and 162 in Sep 2017 which is showing the same as Oct 2018's report...multiple examples of this if you compare.
https://www.barfoot.co.nz/market-reports/2018/october/residential-sales…
https://www.barfoot.co.nz/market-reports/2018/september/residential-sal…
Noticed it trying to update some stats I am creating on an area of the market I am interested in. Can someone else confirm as maybe its a technology / user error at my end? A cookie or something else technological I do not understand.
Umm...is it just me or do some of the numbers seem exactly the same as last month (i.e. the report is not updated). For example the volume of sales in West Auckland was 131 in Sep 2018 and 162 in Sep 2017 which is showing the same as Oct 2018's report...multiple examples of this if you compare.
https://www.barfoot.co.nz/market-reports/2018/october/residential-sales…
https://www.barfoot.co.nz/market-reports/2018/september/residential-sal…
Noticed it trying to update some stats I am creating on an area of the market I am interested in. Can someone else confirm as maybe its a technology / user error at my end? A cookie or something else technological I do not understand.
Hah, good spot. Flicking between them the September 2017 and October 2017 data looks the same, and much of the September 2018 and October 2018 is identical too. I had a look at the August release and all the numbers are different, as you'd expect. I'd have thought most likely an error at B&T's end? They might appreciate an e-mail.
The housing market update stats quoted in this article look like they don't tally up with the residential sales report, I would hope that the issue is purely with the residential sales report.
And from across the ditch, well let's just say that Aussie housing is being ditched!
A little humour:
An overseas based husband and wife decided to put their home in East Auckland on the market. After a long few weeks they got their first offer and it was much lower than their expectation.
Looking at the offer, husband leaned over to their trusty RE agent and asked “why so low?”
RE Agent: “ it’s just fluctuations”
Husband looked at wife and said “that’s it they don’t like us here, lets sell up and get out of here”
Up there with this golden oldie.....
https://www.youtube.com/watch?v=0YM9Ereg2Zo
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