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Barfoot & Thompson's median price hit new record of $790,000 in September, but the company warns that prices are at a crossroads

Property
Barfoot & Thompson's median price hit new record of $790,000 in September, but the company warns that prices are at a crossroads

Barfoot & Thompson's median selling price rocketed to a new all time high of $790,000 in September, up 4.6% from August's $755,000 but only marginally ahead of the previous all time high of $786,000 set in June.

However the number of unconditional sales has flattened out, with the agency, which is Auckland's largest, selling 1358 homes in September compared with 1314 in August and 1388 in July.

Both the number of sales and the median price remain well up on last year, with the agency selling just 959 homes in September last year at a median price of $635,000. That means the median price is up $155,000, or 24%, year-on-year.

Auckland's biggest real estate agency received 1940 new listings in September compared to 2123 in August and 1314 in September last year.

The new listings it received last month were the highest in any September month for 12 years.  

The total number of properties that Barfoots had available for sale on their books rose to 3148 in September, compared to 2957 in August and 3075 in September last year.

The number of million dollar-plus properties also hit an all time high, with Barfoots selling 428 homes for $1 million or more in September.

In September last year it only sold 164 homes for $1 million more.

Barfoot & Thompson managing director Peter Thompson said the surge in prices may have been influenced by buyers trying to beat new tax rules on investment properties but the traditional spring lift in sales would have been a factor and the increase in new listings was creating a reasonable level of choice for them.

"Whether September's prices have set a trend for the remainder of the year has yet to be seen," he said.

"In the last week of the month there was a fall off in sales made under the hammer at auctions, and there was less pressure on buyers to make immediate decisions.

"This end of month development carries with it a note of caution for sellers, in that September's prices may not prove to be the start of of a new round of increases, and that buyers may not be prepared to overstretch themselves to secure a property.

"The future direction of prices still remains at the crossroads," he said.

In a Quickview note on the figures, ASB economist Kim Mundy said they suggested supply may be catching up with demand in Auckland.

"Low interest rates and strong population growth via net migration will continue to drive demand," she said.

"However an increase in new supply might return some balance to the market. But it remains early days."

Barfoot Auckland

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22 Comments

Gee, even when the housing market is slowing down values keep rising.

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From what I am hearing and reading about the Auckland market it might be better described as " dead cats bounce" YL. Did you not read the whole article where PB is saying it was noticeably quieter at the end of September. The thought of handing one's solicitor an IRD number might have a bit to do with it and the ensuing opening up of a can of worms. There has to be a lot of tax that has not been paid in Auckland. IRD will catch up with a certain amount of it as they scan through LINZ. And I am not talking about overseas sellers here. There are plenty of locals in Auckland who bought and flicked. Even the odd agent who could not help themselves in taking advantage of sellers who had no idea of who the real buyer was.

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are we still blaming evil foreign speculators? or do we realise now that the property disease is endemic?

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Check the regions. Not endemic, no probs there. Few migrants and overseas buyers too. A link?

I think so.

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http://www.nzherald.co.nz/bay-of-plenty-times/news/article.cfm?c_id=150…

http://www.nzherald.co.nz/bay-of-plenty-times/property/news/article.cfm…

Tauranga's house prices were 6.8 times higher than median household income some months ago. Now it's getting worse.
http://www.nzherald.co.nz/bay-of-plenty-times/news/article.cfm?c_id=150…

Not only Auckland is in bubble territory.

...and I don't see many Chinese over here, but plenty of action during the weekends in the real estate world.

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Tauranga and Hamilton are far from bubble territory. Tauranga just eclipsed the average selling price that it had back in 2007! Yields are better, smaller deposits are required and they are cheap in comparison to Auckland property. My bet is that they keep going up for some time in Tauranga and Hamilton as property investors look outside of Auckland and more people move to these areas as Auckland has become to hard to get into the market. Golden triangle = Auckland/Hamilton/Tauranga

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That should keep everyone happy (except the henny-pennies praying for the sky to fall in). With lots of listings coming onto the market there shouldn't be the constant upwards pressure on prices. This will allow buyers to do due diligence and buy without immense pressure. Nevertheless, prices are still strong so current owners don't get hit hard.

I predict prices staying pretty flat through Spring and Summer with the scare-mongers jumping up and down when we see a month or two of declining prices only to be put in their places when the downwards trend doesn't continue.

I think the big question is should a first home buyer, buy now or wait? I know what I would do.

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Wait to see what impact the new rules have I guess. If they have worked then we will see some evidence next month and the next few months. Too early to see in Sep figures. I agree - will be a gradual flattening rather than a crash.

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Wait. It is a no brainer. You only buy when there is some certainty and so you have to see what the new IRD rules achieve. It would be devastating to buy at the top and see some equity disappear.

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I'd buy now. It would be frustrating to miss this window of opportunity. Every time there has been a change in recent years there is uncertainty and the market pulls back. Once the dust settles it's BAU. With the low NZD property must be looking cheap if you're offshore! And now the TPP has assured foreigners the right to buy NZ property. And Auckland's population is growing. And the housing catch up game is a good few years away from being near to sorted.

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Please tell me what is this window of opportunity

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I'd have to agree ...

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And Auckland's population is growing.

Matters not without corresponding jobs growth;

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=115…

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I don't think there has been much of a pull back in the past ~20 years or so in Auckland. With each 'cycle' household debt has increased (and interest rates have got lower), price to income has increased, home ownership has decreased.

Auckland looks very expensive to me, certainly more expensive than Melbourne and pretty similar to Sydney on an income basis.

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Very happy haha! The Auckland house prices are blossoming in the first month of Spring just like the flowers in my garden. Spring has sprung I'd say :)

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50% income tax for multiple property owners.

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even better, 100% deposit.
If they want to gamble at least they do it with their own EXISTING money, not at the expenses of everybody's future.

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Yeap 100% deposit + 200% rates!

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The crash or 'strong correction' will be followed only by economic slowdown when people will not be able to pay of large mortgages. Majority of the properties are rentals - the moment people will not be able to afford the rent - they will move out, no renters -> problem with the repayments -> selling.

On the other hand with the population growing and 'flatmate living' being a norm - i do not see it coming at this stage.

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The Government needs to control by regulation the excessively high commission rates most of the real estate companies/salespeople are allowed to charge, in some cases for very little actual work, all advertising should be paid for by the company/salesperson not by the vendor. Overpriced commissions and hype talk also helps to fuel the overrated/overpriced Auckland market which appears to be flowing down the country like the bullshxt the Auckland property market has become.

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I also suggest ..We also need to change to non recourse mortgages for citizens permanent Residents only, not import credit by other Countries...

As well as make it a crime to over extend someone with a sale for the exorbitant fee structures.

Then the debt becomes a problem for the lender and the agency, not follow the person for life.

https://en.wikipedia.org/wiki/Nonrecourse_debt

We also need to get back to basics, no lending without real cash in the bank to cover the deal.

Credit where cash is multiplied x 14 and thereby leveraged houses to the hilt, was never the answer, for houses until after the Gold Standard was discarded.

And Banks were given free reign to make debt a reality of life, not having real money in yer drawers....sorry pockets.

Debt via easy credit is the problem, not the solution. Robbing Peter to pay Paul, is not fair either, with interest rates forced down, not covered for the life of the loan, so we know where we stand and Not underwater.

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Excellent totally agree

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