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House sales and prices strong again in May, Barfoots says
Barfoot and Thompson, Auckland's biggest real estate agency group, has reported sales and prices in May were strong because of firm buyer demand and a shortage of listings, extending a buoyant autumn in the housing market. Barfoot and Thompson is the first of the real estate firms to report figures for May and handles about 40% of the sales in New Zealand's biggest real estate market. Average sales prices rose 6.2% to a 12 month high of NZ$533,909 in May, while the volume of sales rose 1% in May to 814 from 809 in April. This volume was 58% up on May a year ago, Barfoot and Thompson said. However, rents eased in May as landlords discounted to fill properties. "There was real depth and strength to the market in May, with sales volume at 814 being one percent higher than in April and 58.1 percent higher than May last year, said Peter Thompson, Managing Director of Barfoot & Thompson. "This was our best month's trading for more than two years in terms of achieving both high volume and high prices," Thompson said.
"It was also the third consecutive month when we sold more than 800 homes, a target we never achieved once last year," he said. "There was a noticeable increase in demand for homes in the more established suburbs and we sold 57 homes in the NZ$1 million plus category, the highest number in one month for 18 months. It all adds up to a housing market that is active, confident and stable." Thompson said the low number of homes available for sale was a challenge. Barfoot & Thompson listed 1186 new properties in May, similar to the number in April and 14.9 percent lower than in May last year. "Restricted availability is a factor contributing to the price gains being achieved. With buyer demand strong, now represents an excellent time for property owners with realistic price expectations to test the market. Properties at the right asking price will sell," Thompson said. Meanwhile rents cooled. Weekly rentals averaged $379, down $20 a week and the lowest average weekly rent for 19 months. "Demand for rental property is easing. Landlords are prepared to trim their rental expectations to find tenants." Thompson said he expected market activity to ease slightly during winter.
WHAT SAY YOU ROSS BRADER
WHAT SAY YOU ROSS BRADER FROM POINT CHEVALIER PROFESSIONALS,HOW DO THE STATS AND COMMENTS IN THIS ARTICLE MEAUSURE UP TO THE WAY YOU SEE THE MARKET?.cheers
GDP, employement, wages & salaries
GDP, employement, wages & salaries are all declining and yet house prices are going up, will this be the next TUI advertisement?
I'm still in the property
I'm still in the property going down boat, notwithstanding the above. I see it as a blip, with a lot of info still being hidden behind the figures. What's the make up of the houses, the days to sell, relisting rates, suburb averages, difference between actual listed price and sale, auction failures etc.
The key point is that rents are falling...which indicates further bad times ahead.
Excluding the Fonterra news, growing unemployment, the NZ$ killing tourism, the increasing interest rates...
Just becasue the kite has had a temporary uplift draft doesn't mean it won't hit the ground shortly.
Gravity (or in this case economics) always wins.
When you have the expectation
When you have the expectation that falling interest rates will buoy the market, people will act on that expectation and the prophecy will be self fulfilling to a degree. However, once the supply of self proclaimed bargain hunters is exhausted, we will run up against the same set of constraints that caused the downturn, as you cannot escape the fundamental reality of the overvaluation of housing relative to incomes.
Realist, Im with you.. just
Realist,
Im with you.. just as Shuttle said, everything else is going down. Infact if you notice the data is skewed. There were heaps of Million dollar houses sold last month, the highest in 18 months. now that obviously will push the average house price up. Wait till the QV data is out and we will get a better idea.
John, how right you are.
John,
how right you are. If everything was going the other way, (incomes up, interest rates going down, employment increasing, tourism going well, dairy prices up etc) but house prices heading down the RE, property gurus would be saying
'but look at the fundamentals, it's clearly bad data etc'
but turn it round to today and somehow it's all different.
The patient may have had the surgery but the outlook it still bleak.
I too have studied the
I too have studied the Real Estate Stats ,it appears to me that the Auckland North Shore sales and prices up$ 400K TO$600K have taken quite a hit,keep the higher sales over that figure out of the equation and it looks to me the median sales figure are down quite a lot.
I wonder why the $1m
I wonder why the $1m plus houses are being sold? ( and at what, v's CV or original asking price) Do the 'rich' know something we peasants don't?
Jill - here's the local
Jill - here's the local picture and keep in mind I am talking about a highly sought after inner city suburb containing only 2,500 homes, but I am hearing a similar situation exists in many of the inner city Auckland suburbs.
Prices in the Pt Chevalier area are currently around 9% down on the peak that could have been achieved in Nov 2007 however in the last quarter of 2008 they were down around 15% so there has actually been an improvement so far in 2009 but prices are certainly still down. The combination of lower prices and lower interest rates is proving too tempting and buyers have given up waiting for the 30% price crash.
If asking prices are realistic and reflect the drop from the peak then they are selling fast - most of our homes this year have taken less than 3 weeks to sell over 70% had multiple offers and two sold for more than the asking price. We have now run out of houses and if we could get another 25 or 30 homes in Westmere and Pt Chevalier we could sell them within a month.
Open home attendances in 2009 have been as strong as at any time during the last 6 years, totally different to the majority of 2008 when hardly anyone turned up and homes took months to sell.
Volume of sales in the Pt Chevalier area is tracking towards 117 for 2009 compared to only 86 in 2008 but still well below the 10 year average of 150 sales per year.
If we cannot encourage more people to list their homes for sale and we continue to register around 30 new buyers every week supply and demand imbalance will see prices remain stable or maybe even, dare I say it, increase!
This is quite the opposite to last year when we were absolutely swamped with listings, had very few buyers and many sellers withdrew their homes from sale due to lack of interest. Since then most have refixed at a very low rate and are staying put.
Last year buyers did think prices could fall 30% - it was pretty dire!
Nobody really knows what the future holds but we immediately need at least 25 to 30 homes and I suspect that there are many areas of NZ striking the same problem.
There is no way that we would have seen a "recovery" if mortgage interest rates had stayed above 8% so low rates have certainly been a key factor in the resurgence. Can't see it lasting if interest rates continue to climb.
My view although based on a limited geographic area is that most of the activity is taking place with people who were already in the market, now using this time to upgrade. Most of these people have owned homes for 10 years or more and LVR ratios are very comfortable compared with say an 80% first home borrower.
There was a surge of investor buyer activity when mortgage rates were under 6% and term investment rates under 4% but that appears to have died off. There are also many first home buyers being assisted by parents into a home and parents buying as investments and the kids live there.
A few more expanded comments from me in this thread at http://www.realestate.co.nz/blog/nz-property-report-may-2009.html
Looks like my retiring friends
Looks like my retiring friends were right, a few months ago. Aussie, here they come! Spring is going to be a much better time to sell.
Thanks Ross for your reply
Thanks Ross for your reply it does give to me an entirely different perspective than what gets reported from other Real Estate talking heads.One question ?If that other company says they sell up to 40%of the Auckland Real Estate market in any month,and if they say 800properties sold is that an Auckland total for them ,or is the total app 2000 properties,for all agencies. cheers
Thanks Ross But your thoughts
Thanks Ross
But your thoughts are too facts or data based. We are more like to hear people talking down the property market because all different reasons, lots of "IF".
Ross So do you tell
Ross
So do you tell would be sellers "you should list your home with me and I will sell it quickly, otherwise prices will rise"?
Why would a Pt Chev dweller think thats a good idea?
Do the greedy rich and
Do the greedy rich and corrupt Swiss and American bankers/ managers hide their money/ skin and buy properties in New Zealand ?
Jill - the data is
Jill - the data is freely available at http://www.reinz.org.nz/reinz/index.cfm?C0987AB9-F9D5-D36A-EED8-BAC1BA48...
In April Barfoots sold 809 and the Auckland total was 2,081 so 38.9% market share.
Barfoot and REINZ data is for sales that actually went unconditional in the previous month whereas QV data is for sales that settled and new owners moved in during that month. For example a house may sell in May and show up in data just released by Barfoots but if it doesn't actually settle until July it will not show up in QV data until August.
emcd - there's no disputing that the facts show there has been a recovery in volume underway for 4 months however I freely admit that increasing unemployment, higher interest rates, low net migration could see it head in the opposite direction again quite rapidly - who knows! I doubt anyone in business today has ever seen such a volatile climate in their working lives.
IanC - I am not predicting a price rise and sellers who are buying again in the same market seem pretty happy with the outcome. The trade up gap has reduced significantly. I can tell you last year people got fairly sick of being on the market for months on end, keeping the house tidy, going out while open homes were on etc and 6 weeks seems to be the tolerance level after which it all gets a bit too much.
One major reason for there being a shortage of listings is that there are many potential sellers who have now decided that they will wait until Spring/Summer then sell their homes at what they expect will be a higher price. (This could prove to be a rather large mistake if the market is flooded with new listings and by then interest rates may have increased well above rates available today and maybe unemployment will increase)
Hey, what do you think
Hey, what do you think Bollard makes of housing getting a second wind? He must be spewing! Re-igniting our explosion of external debt, all towards non-productive assets! All in a recession & Fonterra prices imploding. Wow, the Kiwi Way of splurging our all on housing sure takes some beating!
It is just the eye
It is just the eye of the storm. I reminds me of those people who duing a major cyclone, go outside and think it is all over, and then get caught out when the other half of the cyclone hits.
I am always amazed at how many replies to property related postes there are. A lot of people must have a lot of hope that house prices don't fall too much more, so they don't owe more than the house is worth, and they they don't end up with negative equity. Agents will almost always only advertise 'good news' as that is what there customers want to hear.
<i>Philly Says: June 4th, 2009
Philly Says:
June 4th, 2009 at 4:48 pm
Hey, what do you think Bollard makes of housing getting a second wind?
That is why he probably won't drop interest rates further. He will also probably put out a warning about house prices, and that they expect them to drop by quite a bit yet.
Nice to see an agent
Nice to see an agent who can see the range of possibilities. This second wind must have partly been caused by the incentive for some buyers to be moved by low interest rates. On the other hand those rates are already tending to rise again for some contracts.
People will continue to save a bigger deposit for a first home but for those thinking of selling and rebuying the insecurities of income over the short term could well be the reason for low numbers of listings. A longer term fixed contract mortgage is only good if you have a guarantee of income to pay. Much better is a higher deposit in the first place and while rents are low and falling, why would they buy except to get that comfortable 'nest'?
see http://www.interest.co.nz/ratesblog/index.php/2009/06/04/housing-rebound... above
Logical Dave, that's very.......logical! I
Logical Dave, that's very.......logical! I agree with you 100%, because it makes sense.
"GDP, employement, wages & salaries
"GDP, employement, wages & salaries are all declining....."
WHO CARES?! Really?!
Most that are buying up houses now (and from the very start) aren't even New Zealanders.
Sad to see many people in this country only think or believe that those who are buying up houses are New Zealanders only, so many of us here are so narrow minded...
Houses in NZ are still cheap as chips for foreign people (talking about Asian or Eurpean). In many asian cities for example, you pay millions for a 2 bedroom shoebox type high rise appartment, here in NZ you pay half of that and you can buy a nice 4 bedroom home in a good area in Northshore with land! yes! a big back yard! and beautiful views too!! (value for money? Hell Yes!)
Ture quotes...and different people is saying the same thing all the time!
("Wow, houses are so cheap here! I want two please! Oh and I will tell my families and friends how great New Zealand is and they will bring their money and move here too!"
" I have a house in New Zealand but i don't live there, I bought it because it was cheap, I'll go there someday for holiday")
We need to face the fact otherwise people in this country will always be left to the end and become the ones that always ask "what happened?"
We are still amazed that
We are still amazed that people in New Zealand actually think buying an overvalued property in the current economic environment is actually a good idea.
May as well wave goodbye to any deposit you put down.
We'll keep our sizeable deposit, thank you and continue to use it to make us more money (rather than paying the bank those lovely interest payments). Then when the market really does hit the bottom when interest rates and unemployment are rocketing we'll swoop in and grab a nice little property from one of those unlucky lemmings.
small kev, One in four
small kev,
One in four people in this country weren't born here, so it's no great shock that you seem to know two people who think prices are cheap.
The reality is that when you purchase a house you are also paying for the intangible value of the area and in NZ this might look good for many reasons.
The things which NZ born and raised people who don't have excess funds have to decide when they purchase a house in these uncertain times is is the purchase of the house worth 20 years of my hard labor to pay for it. What will the country look like in 20 years?
This is a different mindset from over-sea's people in their 40's, who earn more per hour, thinking is it cheap and if I don't like the place I will leave.
The question no one know's is is this as cheap as it's going to get? And, how do you make a comparison of cheapness in a global recession anyway?
small kev, Have you seen
small kev,
Have you seen the price of houses in USA, some are a lot better value than they are here. NZ houses on the whole are very poor construction, uninsulated, compared to the quiality you can get in the US. The value of a house is relative to income in most countries. Houses in the USA are very cheap comapred to their wages. It is simailr in the UK, based on their high wages, aprt from in central london. The government in NZ should be cracking down on properties being purchased by offshore investors, becuase you are right, a large percentage of NZ house buyers are offshore buyers, partly becuase we don't have any captial gains tax, and our tax systems favour house ownership.
I have been few cities
I have been few cities of USA and Europe for last ten years. I should say the property prices are far more expensive than Auckland over there, I am talking about ratio to incomes. But Auckland is different, Auckland is more like a midiam size town in States, the housing market should follow the housing market of samall American towns which the price mas dropped for last three years.
Who cares about the financial crisis has been bottom or not, or recession has recovered. All you need to believe is the price will drop 30% soon, before end of the year.
Nah, come on guys, watch
Nah, come on guys, watch a few of the Holmes on homes programmes why don't you. Ok they are based in Canada I think, but jeez you gotta conclude there are poorly built dumps in all countries.
As for property having a
As for property having a 'recovery' as it slides down the slope into the pit, it's a bit like watching the aussie americas cup entry that sank off California isn't it, you hear this cracking sound as the hull snaps in the middle and water floods over the sides, then the whole heap rises on the crest of a swell before the scramble to get off and the property sector sinks beneath the surface never to be seen again.
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