Barfoot & Thompson, Auckland's biggest real estate agent, says it sold 10% more properties in May this year than in May 2012, with the average price up slightly from April to $644,737.
The company, which accounts for about a third of Auckland house sales, said it sold 1,284 properties in May. That's 21% more than the 1,062 sold in April this year, and 10% more than the 1,165 in May last year. At 1,315, new listings were the lowest in four months, and down 14% on April.
“At the end of May we had 3,034 properties on our books, our lowest number in more than a decade. At current sales levels that represents only 8 to 9 weeks of stock," said Peter Thompson, Barfoot & Thompson's managing director.
“Auckland remains a market where there are too many people chasing too few properties, and until there is an increase in the number of properties buyers will remain frustrated at the limited choice available.”
Interest.co.nz has tracked Barfoot & Thompson data since January 2001, which shows inventory has never been as low as it is now. The previous low - in that time period - was December last year at 3,410. Westpac senior economist Michael Gordon said Barfoot & Thompson's number of available listings is now equivalent to 2.8 months worth of sales, the lowest ratio on record going back to 1998.
"The Auckland housing market remains remarkably tight, with available listings in May hitting their lowest on record," Gordon said. "This lack of supply is likely to be both constraining turnover and squeezing prices higher."
"We expect nationwide house prices to rise 9.5% this year, and a further 7.5% next year. Notably, the Reserve Bank's house price forecasts are not too dissimilar from ours. The point of difference is that the Reserve Bank expects the knock-on effects from house prices to household spending and inflation pressures to be more muted compared to past cycles. We're not convinced that this time will be different, and we maintain our view that higher interest rates will be needed from next year," Gordon added.
Central suburbs average sale price up 21% year-on-year
Barfoot & Thompson's May's average sales price of $644,737, was up $1,648 from April's $643,089, but $1,191 lower than March's record high of $645,928. For Auckland's central suburbs the average sale price rose $146,451, or 21%, from May 2012 to May 2013 to $848,892.
However, Thompson suggested upward price momentum that began in October last year had now stalled.
“While realistically priced properties still continue to sell almost as soon as they come on the market, there is resistance to going above current values," said Thompson. “Buyers can see value in the prices at which properties are currently changing hands, but they are not adopting a 'buy at any price' attitude."
Thompson suggested that; "Rather than experiencing runaway prices, the Auckland property market has come out of the other side of a period of price rebalancing caused by five years of modest price growth."
“May’s average price is 10.7% ahead of the average price in May last year. While some properties sell well above their CVs, they are the exception and there are often valid reasons for the price differential."
May's median sales price was $570,000, up $4,000 from April, but $10,000 below March.
During May Thompson said his firm sold 144 properties for more than $1 million and 519 properties for less than $500,000. See Barfoot & Thompson's full market analysis here.