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Barfoot and Thompson says it sold more houses in March than in any month for 5 years, says inventory low, prices 'not spiralling'

Posted in Property

Barfoot & Thompson, Auckland's biggest real estate firm, says it sold more houses during March than in any month for five years, with the average price up 6.5% from February but down 1.7% from March 2011.

The firm's managing director Peter Thompson said the strong sales were again placing pressure on choice, with Barfoot & Thompson having 4,771 homes on its books at the end of March, despite listing 1,537 new properties during the month.

“Our number of listings at the end of March is down 17.8% on those for last March, and is the lowest we have had at this time of the year for four years," said Thompson.

He said the 1,246 homes sold by Barfoot & Thompson during March was the most it had sold in any month since 1,444 in March 2007. Sales were up 63.1% from February and up 16.4% from March last year.

The average sales price for the month was NZ$571,076, up 6.5% on February but down 1.7% on March last year.

“March was a month where the views of buyers and sellers reached common agreement as to where values were at, and we experienced the highest level of sales since March 2007,” said Thompson

“Prices at this level, accompanied by high turnover, is an indication of the confidence buyers have in the long-term value of Auckland property. The growing population, confidence the economy is improving and affordability at current historically low mortgage interest rates are all factors that are pushing market activity.”

Barfoot & Thompson's comments on low inventory follow those yesterday from Realestate.co.nz CEO Alistair Helm. Helm said at the end of March the national stock of unsold houses on the market dropped to its lowest point since January 2008, with 46,411 unsold houses, apartments and lifestyle properties on the block. He said nationwide inventory - measured as the number of weeks of sales in seasonally adjusted terms - dropping to 32.4 weeks supply from 46.7 weeks a year ago, and below the long-term average of 41 weeks of equivalent sales, making for a sellers' market.

Helm also said the seasonally adjusted national asking price rose again to a new high of NZ$429,865 for March, up 1% for the month and up 3% as compared with a year earlier. And he warned that if the number of houses being listed for sale doesn't increase, the inevitable house price rises that follow will risk the market stalling with buying moving out of reach for many people.

'Prices not spiralling'

Meanwhile, Thompson said the fact March’s average price was NZ$10,000 below the average for March last year and NZ$2,000 below December’s indicates prices aren't "spiralling."

“For the past two years, the March average price has been the highest for the year, and a contributor to the positive prices achieved in March is the effect the seasons have on house sales and values. While prices may move from month to month, the overall trend remains one of a modest increase year-on-year," said Thompson.

He said sales in the NZ$1 million plus category remained strong, with 99 sales.

“It was the highest number of NZ$1 million homes we have sold in a month since March 2007, and brings the number for the past three months to 180, which is 29.5% higher than for the first quarter last year."

Meanwhile, there were 628 sales by Barfoot & Thompson in the under NZ$500,000 category in March.

The Barfoot & Thompson figures are closely watched because they are the first to show sales and prices for any month and Barfoot & Thompson is the biggest agency chain in the biggest market.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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24 Comments

The usual BS spin doctor

The usual BS spin doctor rubbish.
Why oh why do you publish this drival?? Is it to wind people up so they'll blog? If so, it's a quick way to loose loyal followers.
I have no problem referring to the report, BUT WITH some sane commentary from you guys written about it. And NOT a headline of ''Strongest monthly house sales in 5yrs''
e.g It's such a great month that prices are DOWN 1.7% on the same month a year earlier. i.e. 20% p.a. if it continues. I know it's a BS extrapolation, but the spin Dr's do it all the time and some sites just copy and paste it !!!!
Barfoots are only one part of the market (I know there's some correlation with B&T and the rest of the market and B&T publish first...but come on guys. PLEASE please, don't become what you acuse the main stream media of; lazy, 'cut and paste' reporting).
There are SO many ways to spin this report, both positive and negative.
e.g. 'For the past two years, the March average price has been the highest (month) for the year' says Thompson. Thus if March 2012 is down on March 2011, then that COULD be a sign that 2012 prices will fall.
Mind you this type of report has ZERO credibility and usefullness, and further, almost ANY theory could be drawn from it.
Please guys if you're going to do the work of the spin doctors in the real estate industry, warn us you've 'gone to the darkside', or at least put your own opinions to the report.
Cheers a follower for 3 1/2 years.
Factboy
 

Calm down, take two asprins

Calm down, take two asprins and call me in the morning...
It's a free NZ, we are not North Korea. 
Although some would love NZ to be like North Korea where media comes under strict govt rules.

look who the sponsors are on

look who the sponsors are on this site to answer your question. Banks are criminal institutions , that is a FACT, yet........ 

People can only see what they

People can only see what they want to see.  Confirmation bias is a wonderful thing.

6.5% a month - would not want

6.5% a month - would not want to be sitting around dithering at that rate of inflation.

A farm just sold around here.

A farm just sold around here.  It was listed at 2.5 -6, I think its Gv. It sold last week at 1.8mill.  Farmer was sick and met the market.  We have further to fall, you would never get that info from the MSM.

March '07 = previous market

March '07 = previous market peak.  March '12 = ............

The 2012 calander year peak

The 2012 calander year peak for: median price, average price, number of sales, media hysteria?

With 628 sales under $500,000

With 628 sales under $500,000 it is the resurgence of first home and investment buyer activity that has seen the Barfoot average price drop. Sales are now rampant again in lower value South Auckland, West Auckland and North Shore areas where it is now cheaper to own than rent so long as you have a 10% deposit.
Banks are doing big discount deals on their fixed and floating rates, Kiwi Saver funds are being accessed for homes and parents are helping fund the youngsters into a first home.
With low inventory prices can only go one way - Up!

Awesome!  With low

Awesome!  With low inventory prices can only go one way - Up!  You are here.

And what does it mean for the

And what does it mean for the average price with 618 sales at or over $500,000?

No skudiv I think you are

No skudiv I think you are wrong - we are at the optimism stage of that chart - plenty of growth to come!
Real estate runs in a 7 year cycle - we have just had 4 years of doom and now we are in the 3 years of boom phase.

Off course its a cycle, that

Off course its a cycle, that explains everything, happy days are back :-)  Thats as long as the wheels don't fall off, then its not a cycle, its just broken. I dont believe we are in a housing cycle, Im too cynical for that, good luck to those that do, Im going with systemic, structural failure.

I would be interesting to see

I would be interesting to see how that 7 year cycle worked out from 1962 to 1982. Might just show that it is bollocks.
 
 

5 years out from the peak

5 years out from the peak according to B&T prices, so another 2 years of boom, then doom again.  Funny.  The Kondratieve cycle puts us at the end of autumn/recession or the start of winter/depression.  The fourth turning puts us at the start/middle of the fourth turning.  The debt supercycle puts us near the limits of expansion.  Peak oil puts us near the top (it's not really a cycle though).  I don't mind to be wrong though, and a good cashflow rental property makes more sense then govt bonds, thats for sure.  Though optomistic highly leveraged/undercapitalised participants in any market invairably increase volitility.

That's bull bigblue, sounds

That's bull bigblue, sounds like you've been to one too many property seminars.
The old "rules" no longer apply. 
Think about it:
- There's limited ability for households to expand their incomes, when many households now have both mum and dad working, and in a time of limited wage growth
- The time of unrestrained credit growth has passed, and interest rates have been pulled down about as low as they can go. The only direction for the cost of credit is up  
- the baby boomer generation has passed through its peak house buying activity phase (the youngest boomers are now around 47). Prospective first home buyers are struggling to afford current prices, let alone prices any higher  
- we are in the midst of a long period of ongoing economic  underperformance, driven by deleveraging, restrained government spending and demographics
I'm not saying prices will collapse, what I am saying is there will be no boom

http://www.nzherald.co.nz/bus

BOOM

BOOM

Gay Lynn

Gay Lynn

You lot are totally missing

You lot are totally missing the point.
It is not whether prices are up or down as compared to some high point in the past.
What is important is that people are voting with their cheque books showing confidence
in the market with a real vengeance.
Soon we will see more stories about rental shortages as the cheaper "renter " properties get sold off with litttle or nothing to replace them.
We will see even more rent rises as the investors continue to sell up, hounded by the clamour from the far left merchants of envy.
Add to that the new tax disincentives and the calls for capital gains tax and the result will be exact opposite of what was intended.
Rents are set to double and as they rise, even more pressure will go on the market.
Barfoots report that last month was a record for sales is just the beginning.
 

BigDaddy,   I completely

BigDaddy,
 
I completely disagree (in Auckland at least).
Yes, people are showing confidece in the market again but that's only because we're back to 95% home loans at low interest rates. Add in kiwisaver tap-ins and welcome-home loand and subsidies and many of these first-home owners are getting into the market with 97%-98% loans and no savings! In short, it's a false-confidence.
I'm a cashed-up first home buyer who would dearly love to buy my first property in Auckland. However, right now with prices where they are and a COMPLETE lack of choice in the market it's grim shopping out there. Thankfully I currently rent with my partner in a place that's pretty cost-effective for us even though that involves making a bunch of lifestyle sacrifices to keep the rent low (we need a bigger place but make do).
I will NOT enter the property market until the hype dies down, and we're still suffering the afterglow of the 2000s boom.
If rents do as you say and double, this won't push me into buying a place, it'll push me out of Auckland. I'm already sacrificing a lot to live here when I could earn just as much in a smaller city in NZ. The rate my peers are quitting NZ and quitting Auckland for elsewhere in NZ, it's a sign that people in my position have flat-out had enough and we're considering other options rather than just sucking it up as we're being told.
Beware the obvious... people can barely afford to buy or rent in Auckland as it stands, there simply isn't the cash to fuel a boom. It's easier and cheaper to borrow now than it ever has been, the market activity should be MILES ahead of where it is now. There comes a time when pumping more steroids (cheap money) in has no more effect. We're there now. So where to from here?

We bought a second house in

We bought a second house in early 2009 for eventual owner occupation. Market confidence was low, competing buyers were thin on the ground and interest rates were historically low. The theory was to buy and sell on the same market, but we never got around to selling as the financial pressure didn't seem too great. 
Conventional wisdom was that we were mad to buy a more expensive house as financial armageddon was nigh, but we figured that interest rates and prices tend to move in tandem i.e. If we were paying higher interest rates they would be accompanied by a stronger economy and housing market.
We got that wrong. Three years on, we've yet to move in, but a combination of even lower interest rates and strong rental demand combine to give us a holding position better than we ever expected. Rental income is up 18% and interest cost is down 15%. The same house would theoretically cost us 16% more to buy on the current market, if we could find it.
Time will tell how long this continues but it would take a huge change in the hold economics to make us cough up a house. It's now our superannuation plan. It took us a while to get on the ladder, but becomes easier by the day to stay on it. We are probably part of your problem re listings. 
I hope you find a home at some stage. In my experience it will never be an obvious time to buy. The combination of low prices and personal optimism have never been there in my lifetime. Your luck may be better. 
 
As for rents doubling any time soon, it's hard to see where the money will come from, but equally the last three years have surprised us so who knows. 
 
 

Absolutely agree. We have

Absolutely agree. We have never intentionally purchased an investment property, only homes to live in or homes to be lived in, but perversely the GFC has been good to us and I imagine to most that have kept their jobs over the period.
The transfer of wealth from saver to borrower must be considerable over the last 3 or so years. We certainly don't want to sell up and be left with alternative investment decisions. We wouldn't have a clue where to put it to retain the buying power over the next 30 or so years.