The number of homes sold by Barfoot & Thompson bounced back last month and prices surged to record highs.
The company, which is Auckland's largest real estate agency by a substantial margin, sold 1110 residential properties in March, almost exactly double the 556 properties it sold in February.
However, the sales were still the lowest for a March month since 2011 and well below the 1341 properties sold in the same month last year.
The average and median prices of properties the agency sold also surged in March, with the median price hitting $900,000 compared to $820,000 in February, and the average price hitting $968,570 compared to $944,574 in February.
While the number of sales and selling prices were up, the number of new listings the agency signed up was down in March at 1983, compared to 2295 new listings in February.
That took the total number of homes Barfoot had available for sale at the end of the month to 4413 compared to 4546 in February and 3093 at the end of March last year.
"This upturn was always on the cards after the quiet January-February period," Barfoot & Thompson managing director Peter Thompson said.
However, Thompson warned that the market was changing and buyer choice was the best it had been in the month of March for the last four years.
"The back story to these numbers is that clearance under the hammer at auction was down to around 40%, and more sales were agreed in after auction negotiations following vendors and buyers making modest compromises on their positions," he said.
"Traditionally March is the high point for prices in the first half of the year.
"Vendors that accept the market is changing and that there is greater choice available are the ones most likely to achieve a successful sales outcome in the coming months."
Thompson said 40.6% of March's sales were for prices above $1 million and 6% were for above $2 million.
Just 8.9% of properties sold for less than $500,000.
Barfoot Auckland
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142 Comments
Hip-Hip Hooray! To be honest this sale surge and record prices are not a surprise to me at all, in fact this is exactly what Zach and I have been talking about. We have been ‘out there’ on the ground observing the trend and it is definitely not the correction like what most people here are claiming. I have given so many examples to prove my point in the last month or so and the news today just confirms it. Yes the market is changing a little, but a slower single digit growth rate is actually healthy for all (FHBs as well as investors), as the growth rate we have in the last couple of years are not sustainable. What we have having now is a drizzle, not a storm, and certainly not Cyclone Debbie! The sunshine will be out before you know it…
You really don't get it do you!? All this shows is that Investors are ditching their properties and prices will start to erode with a glut of properties on the market.
This is exactly what happened during the GFC in the UK, properties surged on to the market, initially did well and then gradually declined in to a -20% crash. A property crash doesn't happen over night you know.
Totally agree
This is not showing what is really happening, Prices keep dropping probably 2-3% monthly
Just MAINLY because investors (buying from 400k to 900k) are totally off the market.
See how many properties are NOT SOLD in the Bracket 500k to1mill (90% not sold)
Its not about the real estate is good vs sky is falling battle! NZ WILL NOT get richer by buying and selling expensive houses to each other. The best thing that could possibly happen is a short sharp price decline followed by years of prices going nowhere. This is not going to happen, but guys come on. Consistantly rising prices of peoples homes, will continue to lock more and more people out of home ownership. As i have said, the sooner real estate isnt even a conversation topic the better.
>"Consistantly rising prices of peoples homes, will continue to lock more and more people out of home ownership."
Well...Yeah...I think you can clearly differentiate between investors (foreign and local) who have zero regard for the needs of NZers, and people who see a need for reform to achieve a goal of housing affordability.
For the first group, the needs of NZers for homes simply doesn't factor into the equation. It's all about their personal dollar.
Totally agree with all that. Let me add 2 things: Without a change in Government there will be no policies conducive to a price fall. Secondly, with only about 8% of sales below $500k Auckland no longer has any affordable housing to sell. The median price is just that; the one in the middle. It is simple mathematics that if the people at the bottom of the ladder can't afford the "cheap" housing, the "median" figure has to increase.
Zachary where have you been all day today? It's a winning Thursday for us coz 2x of our DGZ properties we talked about sold just today!
1) 43 Orakei Rd (https://www.barfoot.co.nz/589879) - Sold for $3.1m (35% above CV of $2.3m)
2) 16 Combes Rd (https://www.bayleys.co.nz/Listing/Auckland/Auckland/Remuera/1751084) - Sold under the hammer this morning for $3.63m (65% above CV of $2.2m)
No wonder the reported sales surge and awakening of the property market :-)
Hippity hip...
Double-GZ I see homes.co.nz were right on the money for the Orakei Rd property. The Combes Rd property exceeded the estimate due to the renovations and additions but the vendors must be happy with that. The market for these sorts of homes seems to be hotter than ever before.
This data is also pretty meaningless without knowing the composition of the properties sold. The median for the month has increased ~9% while the average went up ~2.5%. This alone points to a huge skewing of sales towards the top end of the range. Example set of houses to prove point:
[300k, 600k, 600k, 700k, 700k] = median of 600k and mean of 580k
vs
[not sold, 575k, 575k, 675k, , 675k] = median of 625k, mean of 625k.
Mean and average have both increased when in reality the value of each property has actually gone down.
edit: Would be interesting to look at a break down of the C.Vs of each property sold in each month and compare distributions. Probably not too hard to scrape/script either, given the list of properties sold. Very tedious to do manually though.
Sales was achieved as many vendors compromised on the house price. Those who did not are still struggling to find buyer. Market is slow but not out and down but yes vendors are able to get realistic price and those expecting higher are disappointed.
In Pakuranga area, property that were selling early (Jan/Feb'16) last year in early 800s had gone to early 900s to Million in middle of last year and those property are now selling for early to to high 800s or may be if the property is very good for $900000. Still. it is not bad for the vendors but speculators who have no holding capacity and had bought the property in mid last year are forced to sell.
In Farm Cove area property that would ideally go for 1.3million are going near around 1.1million
Will have to wait and watch.
Yep. We are witnessing a massive political failure by both the left and right to manage this, all because they have massive vested interests. As many have noted on this site, a couple of simple changes polically could have prevented the vast majority of this.
1. Immigration. Either cut it to a nominal low figure (say 15k per year foreigners total.. if that means we have negative population growth in some years so be it), or list the minimum income an immigrant needs from a local job is 100k to justify the visa
2. Ban foreign buyers from existing housing
3. Incentivise investors to buy/build/finance new builds like above, and cut other incentives they have, neg gearing etc
Interesting idea but i think in practice it would be difficult operationally. I think people planning to move their lives around the world would probably plan for quite a while, so constantly moving the goal posts probably isnt helpful when we do probably still want the cream of the crop (which would be a tiny fraction of the ppl we are currently letting in).
Calm down DGZ, as I alluded too yesterday, these figures show less lower end sales and are skewed by top end sales, hence higher medians and averages. There has already been a drop back and prices are undoubtedly up to 10% lower than the peak last year already on like for like sales...
Aah, the simplistic beauty of ignoring the fundamentals of maths.
Riddle me this DGZ-Zac.... let's say in one month 1,000 properties sold with a median house price of $700k and in another month 3 properties sold, all at the high end, with a median house price of $1m... would you see that as a GOOD thing, indicating increased values, or a bad thing, indicating unrealistic expectations.
Did you seriously say March 2011 is not that long ago.
You miss my point - which is cherry picking a median house price when the sales volumes are extremely low is misleading. I gave an extreme example of how a median house price headline figure could be obtained.
MisterB try not to argue with the data. Just because it is not the result that you want to see you come up with made-up theory to deny it. You turn A to B, black to white, happy to sad, excitement to disappointment, 1100 sales to 3 sales...funny haha. Zach and I won this battle fair and square. Now don't you turn it to round LOL~
Try using your IT skills to dig a little deeper into the data released today. 60% of suburbs have had price falls in the last month, and the average price change for individual suburbs is a 1% fall. The average has been skewed by the proportion of sales - as you keep telling us sales are still rolling in expensive suburbs but have dropped in cheap suburbs.
Evidently, you do not understand the use of hyperbole. Except when you use it to pump up your prices ;) The fact is, when even Mr B&T is noting that it's a buyers market, that shows all the lead indicators are to price falls.
It seems evident you don't understand differences between the various data points - medians v average, volume v value, sales v QV etc.
It's not a matter of what I want to see come - frankly I am reasonably indifferent, the prices must and will correct eventually. Or, incomes must lift to match. That is a fundamental.
If the mean and median home sale price are both increasing it indicates one of two things.
1. Everything is tickety boo with Auckland real estate
2. Danger, Will Robinson; - Sales volumes have decreased so much that the median purchaser is now a wealthy foreigner. New Zealandres now account for less that 50% of the homes being sold. Truly a crisis of epic proportions.
DubleD you think 12% increase is great try Toronto with a 33%March to March year increase in house prices ! Now that's what you call a giant of a ponzi !
Vancouver cooling off.
Auckland is transitioning from everything going up to sell offs of the lower classes of property and stabilization of the upper classes of property.
The giant debt that requires repayment will prove unmanageable to service by many when interest rates tick
upward as they do quickly in NZ as the Aus banks simply use any excuse to gouge extra profit out of NZ .
Almost like a sport to these Aussie banks
I think you must have missed the March to March comparison in the article. Sales are down compared to March 2016...
Interesting news from the FED will impact global money supply directly impacting interest rates, along with the expected rate increases.
Sorry to say this but we can expect much higher mortgage rates before the end of the year, this will impact the housing market whether we like it or not. If NZ is lucky it will result in a gradual slowing and small correction in prices, BUT we will have to be very lucky.
Now that we are a little further away from the NY, and Xmas holidays and LVR changes it is interesting to see where things are may be heading. The Supply/Demand issue is still a major one and will ensure there is not a 20% correction any time soon as some have predicted...and yes it's all a prediction!
There is a huge emphasis it would seem on Auction clearance rates and whilst this is a good indicator of a growing market it is not always something to be relied on solely. A lot of sales are still being done at relatively high values by negotiation, perhaps small drops in price. There has been a combination of cheap lending, high demand, short supply, etc etc which has pushed growth to crazy levels.
The market plummeting at a rates of knots you would assume would need a combination of all of these factors reversing in a short space of time. A moderate slow perhaps, a massive crash any time soon....not until all factors for the perfect storm are influenced in a major way. Who knows what tomorrow brings as the news has been up and down daily!
True there are a number of factors involved, only one could tip the balance however. interest rates.
High demand and short supply are interlinked. given the large increase in house now on the market you could argue that demand has reduced and supply has increased.
Back to interest rates, they are still low by historic standards.
But as we have seen interest rates are rising, and set to rise significantly higher this year if the FED tightens the global money supply as they are now expected to do.
So the perfect storm seems to already be building. Higher interest rates, decrease in demand, increase in supply.
....OH S#!T ...
March 2013 1,430 properties
March 2014 1,392 properties
March 2015 1,597 properties
March 2016 1,341 properties
March 2017 1,110 properties
So they want us to believe everything is back to normal
with sales 30% down from March 2015... and down against March 2014 and even March 2013...
yes yes..
Price drops are NOTICEABLE
thank you Anonymusse, these are the only stats that are of substance or relevance from the article
SALES HAVEN'T BEEN AS LOW FOR THE LAST 6 YEARS
there's no spinning this. if I worked for B&T, I'd be scared right now. job losses are coming as sales commissions aren't flowing in anymore. especially if you worked in the IT department in their Auckland CBD office (with seaviews) at 34 Shortland Street - they might start outsourcing their IT operations. eeekkkk!
If someone is pushing a pump and dump message then they will say things are fine, things are a little slowly, or it'll pick up after Chinese New Year. Nothing like confidence, or in this case a confidence trick.
Banks are tightening lending in Auckland, interest rates for investors are going up and the prices in Auckland will be affected with nothing to hold the prices up.
And what if interest rates continue to steadily rise for the next 5 years? - there is a high (negative) correlation between interest rates and price growth.
If interest rates continue the trend we've seen recently (backed by inflation expectations) then I "reckon" we will see a continued erosion in prices.
Well exactly, we don't know - but your "reckoning" is just a totally baseless hunch.
My "reckoning" is based on actual macro-economic fundamentals. It's more than a "possibility", it's an educated outlook.
Who's to say that interest rates won't go back to 7%, and be considered a "good rate" again??? Nothing.
In fact, all the indicators suggest the direction for market rates is up.
Cmat,
Can you share these 'macro-economic fundamentals with us? You mention a rate of 7% and I assume that refers to the OCR. Do you believe based on these 'fundamentals' that it is likely to go from 1.75% to 7% and if so,over what time scale?
personally,I think it is unlikely to reach 4% and quite possibly,not even 3.50%. That would require 7 increases at 25basis points a time.
Cmat,
Can you share these 'macro-economic fundamentals with us? You mention a rate of 7% and I assume that refers to the OCR. Do you believe based on these 'fundamentals' that it is likely to go from 1.75% to 7% and if so,over what time scale?
personally,I think it is unlikely to reach 4% and quite possibly,not even 3.50%. That would require 7 increases at 25basis points a time.
Cmat,
Can you share these 'macro-economic fundamentals with us? You mention a rate of 7% and I assume that refers to the OCR. Do you believe based on these 'fundamentals' that it is likely to go from 1.75% to 7% and if so,over what time scale?
personally,I think it is unlikely to reach 4% and quite possibly,not even 3.50%. That would require 7 increases at 25basis points a time.
Sure (since you asked 3 times).
This might be a forlorn exercise given you obviously think the cost of funding in NZ is directly correlated to the OCR ("Linklater" - assume by your handle that you're a lawyer of some sort - no surprises then that you don't understand), however, let's continue.
No, I don't mean the OCR - I mean the cost of funds for the average real estate property purchaser (owner-occupier or investor) - The 2 year fixed rate probably serves as a good proxy for that.
1. First and foremost, Trump's policies are inflationary - this has led to a massive shift in inflation expectations globally. The whole notion that we live in a zero-inflation environment has disappeared. If there is a trade war then this is only exacerbated. Why is this important you ask? Inflation expectations are the bed-rock driver of debt pricing. When inflation expectations change globally then investor's required rate of return adjusts accordingly to preserve their real returns;
2. Banks are forecasting large funding deficits for the coming years. What that means is that the OCR doesn't matter - what matters is their cost of funds. Banks are competing aggressively for deposits to maintain their capital ratios (by offering increased rates) and having to source wholesale funding offshore. Wholesale funding from offshore is set to become more expensive because of (1.) increased inflation and required rates of return;
3. The Reserve Bank of Australia is bullish about Australia's medium term economic prospects. Who cares you say? Well, New Zealand net migration has historically shown some correlation to the relative performance of Australia's economy vs NZ's economy. i.e. When Australia is doing well more people choose to migrate there as opposed to NZ. If Australia improves then less people are likely to migrate to NZ - The key drivers of property prices in NZ are #1 interest rates (i.e. interest rates down, property up) and #2 net migration (i.e. migration up, property up); and
4. Chinese capital constraints. This year China has strengthened its regulations on capital flows to the point it is tantamount to taking a sledgehammer to their citizens' intentions to invest in foreign real estate:
- Overseas direct investment into Real Estate is officially defined as “irrational” and is not permitted;
- Individual’s annual quota of US$50,000 only allowed for current account transactions (tourism, education and purchase of consumer goods). Capital transactions will be strictly forbidden (incl real estate and securities).
- The Politburo have reiterated that sharing or “borrowing” of the US$50k quota is strictly not permitted with increased penalties for offenders.
https://www.ft.com/content/787d0834-f405-11e6-8758-6876151821a6
So yeah, I hope this satisfies your curiosity - those are the top 4 macro drivers I see that will lead to a softening in residential property prices in Auckland over the coming years. That excludes the likely behavioural responses of speculators / "investors" to an environment where they can no longer bank on capital gains.
Over what time scale do I think interest rates will increase? This is the uncertain part - I didn't say 7% was a target i had anchored on for a 2 year rate, just that I wouldn't be surprised if it got there in the medium term. I certainly wouldn't be surprised if the 2 year rate was above 6.0% at the end of 2018.
That doesn't sound like a big change but, on average, debt servicing is 51% of household income for on new purchases. That is the same as at the height of the GFC (2007) when interest rates were at the high point of the cycle. The big difference now is we are at that point when we are, arguably, just past the low point in the monetary cycle (low rates on high principal). When rates increase the principal won't be going away... the question of serviceability will weigh heavier on potential purchasers and financiers:
- Mummy and Daddy coming to the party with your $200k deposit won't be enough to cover the ongoing cost.
- Gross rental yields are only 2-3% - not enough to cover increased service costs.
Prices are unlikely to go up during the next five years. This concept of continual growth in prices is a New Zealand myth, and the sooner it explodes the sooner we can start to have investment in productive parts of the economy. The best that could happen to current owners is static real prices for a number of years until wages and rentals go up. I believe prices have dropped about 10% from the peak and will drop a further 10% by December. The QV figures are based on settlements and delayed data loading so run about two months behind the trend. In addition, because the sales have continued at the top end the average figures in the B-T figures held up. Take capital gains out of property investment and see how much people are prepared to pay for a house.
Pretty true, Auckland is a desirable place to live in. I travelled enough so I know that for a fact. If people want to come here to live then land value will go up. My prediction is house prices will slowly decline to bring back the affordability for some. Once momentum picks up prices will go up again. I'd say 5 years, but it's better for NZ if this process happen in the duration of 10 years. Let's see how well the next government can handle this situation.
Prices are unlikely to go up during the next five years. This concept of continual growth in prices is a New Zealand myth, and the sooner it explodes the sooner we can start to have investment in productive parts of the economy. The best that could happen to current owners is static real prices for a number of years until wages and rentals go up. I believe prices have dropped about 10% from the peak and will drop a further 10% by December. The QV figures are based on settlements and delayed data loading so run about two months behind the trend. In addition, because the sales have continued at the top end the average figures in the B-T figures held up. Take capital gains out of property investment and see how much people are prepared to pay for a house.
Me thinks the market is speaking louder than B&Ts words.
But goodness, I hope all the purchases that are happening are between folks buying and selling in the same market. Could it be that many of the sales agreements are being written as conditional and the reported sales might fall through depending what happens in the chain? Or do Barfoots only report sales that have gone unconditional as sales in these press releases? This is the interesting statement;
"...more sales were agreed in after auction negotiations following vendors and buyers making modest compromises on their positions," he said.
One of the compromises made by sellers is likely to be a conditional offer.
Auction under the hammer (i.e., on the day) clearance rates and sales prices are the only real indicator of today's prices. A sale isn't a sale until it is unconditional. Not sure what they are reporting here.
Good stuff Kate. Most data is consumed by people without any real understanding of what they're looking at and a heavy dose of confirmation bias. Of course, propaganda is essential for them to sacrifice more of their lives for a piece of real estate and the associated (but unseen) risks.
"This has been lowest sales for a march month since 2011".. speaks volumes..
As i said yesterday, the sale prices will be much higher.. for two reasons.
1. Investors getting rid of their expensive speculative properties purchased recently
2. A number of properties selling at the moment are those that have development potential, unitary plan has pushed up prices of houses with land,
It is Mr Thompson's job to be positive about the market and generate turnover (how they get PAID). Shaping numbers to stats to present a desired income is not that hard, and is similar to Govt saying overseas owners are a non event (tui). People present their vested interest.
History shows previous cycle dips in Auckland present as flatter holding period vs big dips seen elsewhere (London very lumpy in cycles for example). I agree that good stuff in the middle seems to holding up well. New Mixed Suburban/Urban zoning allows for much higher intensification that old zoning so this makes sense. One notes that even the Cornwall park Trustboard are buying back their own leasehold property's because most of them will be able to have 3-5 house built on them under the new plan. The far edges of town where a lot of traditionally cheaper houses, much longer travel times (now up to 1-2 hours each way) and "interesting" neighbors, and regional "no jobs" NZ are both destined for a bit of a specuvestor train wreck. Even Tony Alexander advised at a recent seminar that Auckland specuvestors always overshoot in the regions in boom times, and that the regions ARE NOT AUCKLAND.
End of the day make your own mind up. If you dont like the status quo vote for change in Sept.
Tauranga isn't quite in the regional no-jobs category but what I am noticing while looking for a new home to rent, is that out of the 256 homes currently for rent in Tauranga, 86 of them are 'available now'. That's 33% which seems pretty high to me. I think some of these outsiders who have invested here thinking they will rent out at Auckland prices might be in for an uncomfortable time. Can't say I'm unhappy about that
Tauranga isn't quite in the regional no-jobs category but what I am noticing while looking for a new home to rent, is that out of the 256 homes currently for rent in Tauranga, 86 of them are 'available now'. That's 33% which seems pretty high to me. I think some of these outsiders who have invested here thinking they will rent out at Auckland prices might be in for an uncomfortable time. Can't say I'm unhappy about that
I believe this is called the "Return to normal" phase.
http://www.housepricecrash.co.uk/images/bubble-lifecycle.gif
Or temporarily supported by record low interest rates. A return back to 'historical average' rates will make it clear what is sustainable and what is not. I find it difficult to believe that Price/Income ratios of 10 or more (or actually much less) will be sustainable when rates return to more normal levels.
Lets not forget its still early days, and this is one month's partial data. There's been plenty of voices on here previously advocating waiting to see trends so we shouldn't get ahead of ourselves that this is the market turning again. It could just very well be part of a dead cat bounce with those who've been holding off for a while starting to move.
FHB couple late 20s/mid 30s. My partner and I have a simple philosophy.
If the market drops to what we deem a reasonable level, we'll buy a house in 1+ years. If it goes up, it is literal madness and we will not enter the market, we will keep renting.
If this housing crisis isn't reigned in and continues to worsen, we'll eventually say '[edit. Ed] you all', ditch Auckland and take our lump sum elsewhere.
NB: In spite of being born a millennial I am checking my privilege – I am fortunate to have savings and options, unlike a lot of people out there who are legitimately struggling, and living week to week (if that) in this god damn town.
How do you determine when a bubble has popped? You'd have no idea. If you did, there would be an enormous temple built for you and politicians and bankers would sacrifice small animals in exchange for your wisdom. Wisdom is not published in the NZ Herald or a real estate agency's media release.
It's interesting data for sure, and quite starkly different from QV data earlier today. One possible squaring of the circle is that this data reports average & median values, and there have been several reports recently about how well the high end of the market is holding up even as the bottom slows down. For example, from the QV article:
Sales were down overall in Auckland and upmarket properties were selling better than those in less expensive areas, according to QV homevalue manager James Steele.
"The top end of the market where cash buyers are not affected by LVRs [Reserve Bank loan-to-value ratio restrictions] continues to see strong value growth... than those in cheaper parts of Auckland such as the city's southern and western outskirts," he said.
So perhaps prices are flat as reported by QV, but Barfoots average prices have risen due to the change in composition?
Look guys if you need any further evidence of why the market is deflating in sales you just need to take a look at the evidence to work out why. Property markets don't crash over night, but with top end buyer being significantly absent it's certainly going to deflate. It's just a case of how rapidly it will slide?
Oh and by the way TradeMe's property listing have increased again to 11029 for Auckland.
Here's some further evidence from Vancouver that show why property prices are dropping in the gateway cities (That includes us).
Vancouver’s Foreign Buyer Tax Didn’t Stop Real Estate Sales, China Did
https://betterdwelling.com/city/vancouver/vancouvers-foreign-buyer-tax-…
They don't want to talk about it. Best to claim that everything is fine and carry on trying to create confidence when buyers should hold off purchasing until the market settles. The signal right now is don't buy, especially don't buy in Auckland. If someone actually does buy they need to put in a brutal offer so they don't get ripped off or end up with negative equity.
Barfoot's figures are very different from QV's figures also published today on Interest.co.nz (i.e. QV has average Auckland house value at $1'045'000 and lower value growth)
http://www.interest.co.nz/property/86858/has-your-house-gone-or-down-va…
Barfoot's figures are on March sales, what are QV's figures based upon? does anyone know, (no guesses, facts please), Greg, can you enlighten us? Thanks
QV = modelled assumed value on the entire housing stock (e.g Auckland = 1mil properties). This very much differs from median house sale price based on a subset of 1100 sales.
I assume their model variables are proprietary but will be slowly moving over time based on # val requests, actual sales #s and $'s etc etc.
All the spriuk in the world won't change what is happening in Auckland. Whether it be the NZ Herald's full assault over the last week or the planted spruikers here on interest.co.nz dragging down the quality of this website, what will happen will happen.
What is hilarious is that all of these parties think they can influence what happens from here.
See what you want to see, but for my money this data still supports the Auckland market undergoing a big slow down with prices pointing downwards. If Barfoot's reported increase in median/average helps you feel that market is going gangbusters, that's great, enjoy :)
You've got to love statistics...
From Feb 2017 to March 2017 Barfoot's average sale prices were down significantly in all suburban Auckland areas bar one:
(Approximately:)
Central Suburbs -5%
Eastern -30%
North Shore -10%
Pakuranga -5%
Rodney -20%
South +20%
West -25%
Yet the average sale price was up!! And the median even higher. Did a change in distribution of what was sold mask the facts...
https://www.barfoot.co.nz/market-reports/2017/february/residential-sale…
https://www.barfoot.co.nz/market-reports/2017/march/residential-sales-r…
Straight from the horses mouth...
Those were approximate percentages, done in my head... Someone else can do it exactly if they wish...
Nice work Chris. Looking at the data on these links it becomes clear that the distribution of sales has changed from Feb to March. The pricier suburbs are a higher percentage of overall sales in march compared with Feb. E.g. eastern suburbs, North Shore and howick are all larger percentage of sales in march vs Feb, whereas Franklin and south auckland are a smaller percentage of sales. So the distribution has changed and hence the headlines are meaningless. Funny how this always gets missed by the experts.
I got curious and compared those to the same Feb-Mar last year:
How does March 2017 compare to March 2016
Interesting stuff. Quite different to what March was to February a year ago.
LOL yes its a game for long term players.The real issue is the level of commitment it now requires for FHB. Two people working that need to stay together and you even need to look at the possibility of getting in a flatmate for 10 years. Essentially a lot of compromises now required for the first 10 years. Many many people in the 50+ age bracket simply don't care now they are eating popcorn in their new car that they stuck on the house.
>"Many many people in the 50+ age bracket simply don't care now they are eating popcorn in their new car that they stuck on the house."
Yep, the very foundation of the intergenerational debate.
These folk who were looked after by preceding generations and their policies (in terms of housing outcomes), and who are happy to not pass the baton on but prefer to sacrifice the following generations for their personal gain. Until it comes time to collect the pension, then they're demanding the younger generations continue to look after them unconditionally.
Not all boomers. I know some who are very angry at what NZ's politicians and their investor-voters have happily done to the next generations, including these boomers' children and grandchildren. Genuine Kiwi boomers who look not only to what they can get out of society, but also what they can contribute.
I wish people out there would study history more.
Sales per month and days to sell are lead indicators of price. The fact the sales are falling and the days to sell is rising means that price is only going down . In this phase of the market not much sells, it takes a long time to sell but prices hold up for the few houses that do sell. Meanwhile supply builds up. I'd expect the REINZ stats out next week to show sales down, days to sell up and prices about flat. It will take another few months before prices start to fall.
What we are also seeing in the market is stuff at the cheaper end is not selling, but the top end of town still is. So your averages and medians get skewed and it looks like prices are still good. They aren't. I am already seeing properties
Yes totally agree Mathclub, otherwise we're destined to repeat the same mistakes. Also I should point out that it's unlikely that Central Auckland will remain that strong against a property crash. Not when you consider the circumstances of how the Auckland market increased so rapidly.
Without the top end buyers, prices will gradually erode as will the surrounding areas. Even London's expensive areas are starting to feel the pinch with foreign buyers being put off by the Brexit issues.
Article: London house prices suffer biggest annual fall for six years:report reveals sellers could pay dearly for over-pricing homes in current market
http://www.homesandproperty.co.uk/property-news/buying/london-house-pri…
Quote from article: Average prices have fallen in 12 boroughs since last January, according to Rightmove's House Price Index, yet the average asking price for a London home is still £624,953, following a month-on-month jump of 2.6 per cent.
Inner London boroughs have seen house prices drop by an average of 2.1 per cent, with the biggest falls of 14.6 per cent in London's most expensive borough, Kensington and Chelsea, where average asking prices have dropped from £2.5 million to £2.1 million.
Good comment Mathclub.
I watched this process unfold around me back in the states a little over a decade ago. Interviewing various RE agents during the process of putting out home on the market, the overwhelming view was that everything was rosy, despite the clear evidence that the RE engine powering the market had seized. The market coasted for a bit, then ran out of energy as the listings accumulated and the number of sales diminished. The nice aspect of this was that after we sold our home, we had a wonderful choice of cheap rentals to choose from as many people decided to rent out their home as it wasn't selling. Got to rent a wonderful $1.1M home for $550/wk...
Interest.co is a very interesting blog website in that it seems to mainly Auckland people who continually make comments on the housing situation in NZ.
The question has to be asked is the people who consistently blog about the overpriced housing employed or in between jobs?
I am able to due to have the time to keep up with things on here due to flexibility that property investment offers.
Someone quoted earlier that the gross return on rentals is approx 2 to 3 per cent??????
That may be the case in Auckland but around the country returns of a minimum of 6 per cent are easily obtainable plus capital gains are forthcoming.
Wish more property investors from Outside Auckland would comment as it is rather tedious continually hearing about the poor unfortunate non house owners in Auckland.
It is possible to own a home for less than renting!!!!!!!
Sluggy, didn't say it was a great return.
What I was implying is that you can buy for cheaper than a mortgage interest rate, so far better to own.
Our returns currently would average around 10 per cent on purchase price plus potential capital gains.
Don't sell though as we are investors rather than fly by nighters.
Well I guess this is why China wants to keep it's money in house and a reason why it's forcibly preventing capital from going abroad (Pardon the pun). :)
Property Buying Frenzy in the City That Doesn't Exist
http://www.bbc.co.uk/programmes/p04yc2h4#play
"almost exactly double the 556 properties it sold in February" Seriously? Who wrote this? As an aside, no one really understands the dynamics and market forces at work here. Everything is guesswork. Call it educated if you like, but a guess is a guess, almost exactly.
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