Post RSS Feed 
Podcast Feed
Barfoot’s average price hits 23 month high as house sales fall slightly in November (Update 1)
December 3rd, 2009Auckland’s largest real estate group, Barfoot and Thompson, said its average sale price hit a 23 month high of NZ$550,217 in November, while the number of sales over the month fell slightly from October. Listings continued to rise during the ’spring selling season’, and were at their highest point since May, Barfoots said. (Update 1 includes comments, chart.)
Barfoot and Thompson Managing Director, Peter Thompson, said the current market was “more rational and measured” than at the height of the boom in 2007. “While low interest rates are a factor, buyers are committing on the basis of the property meeting their check lists and views about value for money,” Thompson said.
“They are not being driven by concerns that they must act or they might miss out,” he said.
Barfoots sold 862 properties over the month, down slightly from 871 in October, but up 58% from November 2008.
The average sale price was up from NZ$544,745 in October.
Here is the full release from Barfoot and Thompson:
The steady upward march of Auckland house prices showed no signs of abating in November, with the average price reaching a 23-month high of $550,217, an increase of 1 percent on the average price for October, and 9.9 percent ahead of the average for the same month last year.
“For the third consecutive month, the average price achieved increased, confirming that prices have consolidated around present levels,” said Peter Thompson, Managing Director of Barfoot & Thompson.
“Auckland property has now recovered all the losses experienced over the past two years.
“The level of activity and strength of prices in the housing market is a strong signal that in Auckland at least property has returned to being seen as a sound, medium to long-term investment option.”
Mr Thompson said that the difference between current activity and during the height of the property boom in 2007 is that the market is more rational and measured.
“While low interest rates are a factor, buyers are committing on the basis of the property meeting their check lists and views about value for money.
“They are not being driven by concerns that they must act or they might miss out.”
For the second consecutive month Barfoot & Thompson listed more than 1600 new properties, which assisted in maintaining the number of properties for sale at more than 5600. This is the highest number of available listings since May.
“There is a good level of choice available at present, making it a balanced market – not favouring either buyers or sellers.”
In November Barfoot & Thompson sold 862 properties, down 1 percent of the number for the previous month and 57.8 percent higher than in November last year.
The average weekly rent achieved during November was $397, a decline of $5 a week over that for October but $16 a week higher than for November last year.
The company let 676 properties in November compared to 760 for the previous month.
Tags: Barfoot and Thompson, House prices, house sales, Housing, Interest Rates, Listings
You may also like to read:
Loading ...
December 3rd, 2009 at 11:30 am
Look at these nice figures John and Bill, and make a decision NOW
December 3rd, 2009 at 11:39 am
@Brien
If these are nice figures, then why is there a need to make a decision NOW?
December 3rd, 2009 at 12:20 pm
With news like that the agents should be busy at the open homes this weekend!
Very early in the month for Barfoots to issue the data – they must be elated!
December 3rd, 2009 at 1:58 pm
I bet if the stats where looked into we would find something like a lot of higher price bracket are being sold below values of 2007 (high fliers over leveraged), and far fewer lower bracket (mum and dads on wages) also selling below 2007 levels.
And it was only a couple weeks ago 1st national commented along these lines, and actually questioned many of the other agencies manipulation of interpreting the stats behind the overall ave.
Just another propaganda, sry marketing ploy to get more people think time to sell and list with B&T
December 3rd, 2009 at 2:47 pm
Warning – excited 20-something bragging:
Yay I bought my first rental property in September 2007 with 100% loan from ASB. Its now pays me $25 per week after all expenses and insurance. And I got it for a steal.
/brag
Although with a capital gains tax I might have to go to Australia with everyone else who haven’t already gone there or London. Who will that leave here? Just the dole bludgers and the few non-property owners who pay for them.
Go NZ!
December 3rd, 2009 at 2:53 pm
Does it worth a news?
My salary is back to two years ago? Wow
Hi Son you are as high as two years ago now? wow
December 3rd, 2009 at 2:57 pm
@Joe
Its a blow for those who believe that its the Government’s job and the market’s responsibility to deliver them the perfect property deal. I.e. housing prices to fall. As if global hyperinflation is going to make any prices fall!
December 3rd, 2009 at 3:01 pm
Why is it that B & T sales and price details are reported as being the Auckland market – the sales figures reported by The Warehouse are not reported as being the NZ retail sales figures!?
B & T are not the only real estate company in Auckland added to which their figures include Northland.
It is quite possible that since 2007 their market share and mix of properties sold has changed and this could significantly skew their data.
December 3rd, 2009 at 3:15 pm
Don’t look for global hyperinflation, John S. That will make your 100% property purchase effectively worthless if you still have it! What will you exchange it for- hyperinflated paper? A hypercredit in your bank account? And who will take from you that which you have? That $25 per week surplus is going to look mighty tiny in that world……
December 3rd, 2009 at 3:31 pm
@ Nicholas
Oh yeah. Like all those other worthless properties from 150 years of inflation.
REAL VALUE = the house i bought
INFLATED VALUE = the mortgage the bank got
Money devalues – not houses. Thats the point.
That $25.00 will adjust for inflation as money devalues and I put the rent up.
December 3rd, 2009 at 3:43 pm
Good on you John S
Just renovated one of my rentals and got a new tenant paying $40 more per week
In Auckland there is still scope to put up rents
What part of NZ are you?
December 3rd, 2009 at 3:56 pm
@ Nicholas
The underlying assets’ value goes up to follow inflation, it’s the interest rate that’ll catch you out. If you’re not locked in and/or your income/rent doesn’t keep up with the inflation you drown. The ideal situation for the property owner would be to have an interest rate locked in low long term giving your income and rent to appreciate whilst repayments remain static.
December 3rd, 2009 at 4:03 pm
My point is to the hyperinflation that John S commented upon. Price rises, that which most people call inflation, are different to money supply inflation. 150 years ago, John S? Try 90 years ago in civilised, developed German! But it couldn’t happen here….
By mid-1923 workers were being paid as often as three times a day. Their wives would meet them, take the money and rush to the shops to exchange it for goods. However, by this time, more and more often, shops were empty. Storekeepers could not obtain goods or could not do business fast enough to protect their cash receipts. Farmers refused to bring produce into the city in return for worthless paper. Food riots broke out. Parties of workers marched into the countryside to dig up vegetables and to loot the farms. Businesses started to close down and unemployment suddenly soared. The economy was collapsing.
http://www.usagold.com/germannightmare.html
December 3rd, 2009 at 4:27 pm
@ Spidey Sense – quite right, my low rate will be up for renewal Sep 2010 and I don’t relish it. However, I have some plans to ’survive’ the higher interest rate. After all, that is the same force bring monetary value down against real value (making my house worth more).
@ Nicholas Arrand – Thankfully share speculators can’t invest in shares on margin anymore (the cause) so we won’t have a sudden margin call sprung. Nor do we have reparations to make as a nation (unless you count our income tax – read: borrowings from central banks) Not that I’m in shares anyway. But I take your point. Perhaps I should have said hyperinflation spread over 10 years. Gods help those without inflation-protected assets.
@ 28_year_old – Ah that would be telling
Thanks for your support. It only takes $0.00 and eight years of reading books for a poor bloke like me to start moving out of the rat race.
December 3rd, 2009 at 4:35 pm
@ 28_year_old – In Auckland. Due to demand and supply.
December 3rd, 2009 at 4:40 pm
Good for you John S. Investment property ownership is often frowned upon on this site. Plenty of fence sitters are kicking themselves now. Thanks to Wally i bought shares three months ago in a copper and gold mine, 25% gain already.
December 3rd, 2009 at 4:43 pm
Thanks to Bernard i fixed for 4 years @ 6.3% a while ago.
December 3rd, 2009 at 5:12 pm
number of actual sales down vs number of actual listings up = a sellers market.
December 3rd, 2009 at 5:45 pm
Early Christmas !!
December 3rd, 2009 at 6:53 pm
Ummmmm , Bernard : The 30 % change in house prices that you predicted , remind me , was that up or down ?
December 3rd, 2009 at 7:12 pm
LAQC, I would be very sceptic about shares. Apperently, it’s next bubble waiting to burst. The rally in stock prices is due to the enormous liquidity that governments and central banks have pumped into the economy
December 3rd, 2009 at 7:30 pm
John S..I can highly recommend the new Martin Hawes book “Letters to Aston” especially if you want to invest in investments outside of property. My biggest knockers are my Gen X mates…they are all haters
December 3rd, 2009 at 7:55 pm
Over hundreds of years, and in USA, Germany, UK even over the last five or six years the value of the average house has been 4 – 4.5 times the average annual wage. These types of stats are too hard to ignore. When we get up to six and seven times as the multiplier something has to give.
What it is varies. Prices come down. Or prices stagnate until wages catch up, but something will bring it back to this 4 – 4.5 multiplier.
I’m sure that what we are seeing now is once more a return to irrational exuberance. Prices can be altered by taxes for a period, especially if the tax system favours investment in them, which has been happening and they certainly will get changed, BUT – that’s not what CGT is needed for. CGT is needed for the more fundamental reason that taxation without it is inequitable.
Prices of houses, just like everything else are always a function of supply/demand/percieved value/cost of inputs etc. People will not stop the old habit of investing in property, even after a tax change that stops the loss attributing thing, unless they personally figure out that it is badly affecting them directly. That’s just the human condition. Maybe the removal of the artificial stimulus being given that market will be the circuit breaker that starts the price decline. I personally wouldn’t want to be in the way when that market starts to change.
It can’t stay up there at seven times. What have we got happening that no developed country in the world hasn’t had over a couple of hundred years? Come on just spend a couple of minutes thinking about it.
December 3rd, 2009 at 7:57 pm
I’m not convinced that you understand what hyperinflation is, John S, if you post “Perhaps I should have said hyperinflation spread over 10 years.” I can only hope that you have done more work on the calculations involved in property speculation than you have on economic theory.
“Definitions used by the media vary from a cumulative inflation rate over three years approaching 100% to “inflation exceeding 50% a month”
And whilst Wikipedia is not the most reliable of sources, I think it will do in this case.
http://en.wikipedia.org/wiki/Hyperinflation
December 3rd, 2009 at 8:20 pm
Spot on Roger, Bernard’s always facing the wrong way.
December 3rd, 2009 at 8:26 pm
John S and 28 year old (Gen y not X) are the reason this country is up the river without a paddle. They are too blind to see it though.
JohnS – hope you are true to your word about the CGT.
December 3rd, 2009 at 8:35 pm
They’re just doing what they’re suppose to do, Andy M. Where would we ( not sure about your age, though!) ‘oldies’ be without the courage, optimism and bravery of the young. They will have 50 years to enjoy the fruits of their investments, or recover from them. Experience is the hardest taskmaster.
I do not agree with their approach, but wish them well. Your country, mine and theirs depends on their success in whatever they choose to do.
December 3rd, 2009 at 9:04 pm
So, Bernard’s prediction might be correct after all, 30% up by the end of 2010?
December 3rd, 2009 at 9:40 pm
‘Over hundreds of years, and in USA, Germany, UK even over the last five or six years the value of the average house has been 4 – 4.5 times the average annual wage. These types of stats are too hard to ignore. When we get up to six and seven times as the multiplier something has to give.’
Are you sure about that? I cant see much value in comparing the value of at 1700’s house to a 2000’s house anyway, but thats just me. I think a large percentage of the population lived in slums/ shared accommodation until the 20th century didn’t they?
December 3rd, 2009 at 9:56 pm
Ah, what great news after spending the last 2 weeks doing 14 hour days renovating a new rental. Looking forward to sitting back and collecting rent for a few years. Up 10% by xmas looks possible
December 3rd, 2009 at 10:52 pm
The average house price through the last century may have been 4-4.5 times average income. It would be interesting to understand if another reason for the increases in prices is due to more dual income households. Additionally the incomes could be higher than previously as the gender pay gap closes. Obviously this would only be 1 factor in the increase in house prices, but my primary belief is that ineffecient taxation and speculation in property is the major driver. NZ will never move forward if it’s people continue to invest so much money in housing and not in businesses that make our country more competive than others.
PS. The housing Market is very hot at the moment, as I have been to and seen house go way above GV. The depressing part is when these houses are then rented out at levels that only capital gains would justify as an investment.
December 3rd, 2009 at 11:00 pm
OK guys, prices might be up at the moment but lets just see where house prices are in 12 month’s time. I’m not saying they will be down much but these price rises won’t continue. There is too much more unemployment and economic pain to come.
But as long as humanity exists on this planet there will be gullible people
December 3rd, 2009 at 11:16 pm
The property market (prices) here in Kaikoura is currently influenced by foreigners.
December 4th, 2009 at 8:27 am
Terrible isn’t it , Walter , all those cashed up foreigners swooping in to pick up our prime property . Us Kiwis gotta stick together mon ami .
December 4th, 2009 at 8:28 am
NZ Government planning to provide long term fixed mortgages to first home buyers at 6% fixed for 10 years.
That should prime the lower end of the market and feed through all price brackets.
December 4th, 2009 at 9:18 am
Another tax payer subsidy to the Growth Lobby.
December 4th, 2009 at 9:34 am
Matt in Auck – maybe Westpac will be proved right and house prices will increase 10% over summer. Wasn’t it Gareth Morgan’s Infometrics that said a few months back that house prices would increase by 24% over the next 3 years.
That would put the Auckland median house price at $700,000 by late 2012.
December 4th, 2009 at 9:38 am
‘Over hundreds of years, and in USA, Germany, UK even over the last five or six years the value of the average house has been 4 – 4.5 times the average annual wage. These types of stats are too hard to ignore. When we get up to six and seven times as the multiplier something has to give.’
If you know of a freestanding house in Germany, New York or London at 4.5 x the average annual wage PLEASE tell me.
December 4th, 2009 at 10:19 am
aa – exactly. Many Europeans see our houses as mansions, they can swap their shoebox over there for a large house on it’s own section here – they see them as cheap!
December 4th, 2009 at 10:34 am
until they have to pay their mortgage and living costs with NZ wages.
December 4th, 2009 at 10:38 am
“until they have to pay their mortgage and living costs with NZ wages.”
Assuming they have a mortgage and aren’t retired!
Many of them have substantial equity and only need a small mortgage or none at all.
December 4th, 2009 at 10:39 am
Yup, it’ the equivalent of us moving to India and buying a house! What does that tell you.
December 4th, 2009 at 10:40 am
I see Anne Gibson doing her usual anti-property article in the Herald. She finishes off with “Price Surge” showing the Auckland average house price going from $367,036 in 2002 to $550,217 in 2009. It’s actually only 5.95% per annum, and just shows her lack of understanding about compounding values over time.
A lot of people can’t get their head around compounding values.
The Auckland average house price has now averaged 9.3% compounding since 1965. Contrary to popular belief, the last decade has been the slowest.
1965 – 1975 = 11.14% compounding per annum.
1975 – 1985 = 14.45%
1985 – 1995 = 8.14%
1995 – 2005 = 5.99%
In fact if you take the last 20 years from $224064 in 1989 to $550,217 in 2009, it equals a measly 4.59% per annum……
December 4th, 2009 at 10:51 am
Murray : The question is , has the median wage compounded at 4.59 % over the last 20 years , to match house prices ? Or if you prefer , the median household income .
December 4th, 2009 at 11:01 am
Roger, I don’t believe they have, and I’ve always argued the increasing income ratio is more a case of low wage increases rather than high house price increases. That, and our obsession with always building bigger houses……
December 7th, 2009 at 2:01 pm
@ Nicholas Arrand – you are correct on the definition. My vehement dislike of money supply inflation via our godly central banks makes me use the term ‘hyperinflation’ incorrectly.
Now please allow an angry and perhaps out of character rant:
To those who say the NZ youth people like me and Mr 28_year_old investing in property are the problem with this country – I would like to know just how successful your own lives have been and what your counter-suggestion is?
Often I find this same discussion takes place between me and somebody in their fifties – the ‘TV generation’ who got a black and white TV in the early 60s and have been glued to it ever since. They think that reading one book a year, talking to their work colleagues and reading the Herald makes them well-read and possessing an abundance of knowledge.
My generation is far more astute than we are given credit for. Perhaps that is why we seek out countries that reward our insights rather than mock them.
The reason this country is going down ‘the gurgler’ is simply because YOU who should know better believes that this is true. This is an amazing country with fantastic opportunities. I can only hope the prevailing national pessimism dies in the mass concrete retirement homes baby-boomers will have to enjoy, ignorant and uninvested.
December 7th, 2009 at 2:53 pm
John,
This is an amazing country with a totally out of kilter economy. All caused within the past 30 years or so
Hell-en and predecessors all brainless and self destructive, not building a robust economy, just mostly make-work-schemes and Banks rorting them and us shamelessly around the whole globe.
Now how to fix that is debatable and problematic, but if you do you will then change the tune of all these bloggers.
Thereby making it totally unneccesary to BLOG.
I look forward to the day when our Politicians and Finance people can make that happen.
So far …I have not even heard of a half-way viable solution from THEM.
There is more sane….(and insane I may add)….advice here than in any one Political Party trying to buy votes and feathering their own nests.
my suggestion is….Read it all….and perhaps offer help and suggestions.
Property debt is half the problem, the future problems are MANY.
Borrowing is not the problem, any one does that at his own risk, especially at these low rates from abroad.
However, paying it back in the future….may be a real problem.
Ask any average American or BLUE CHIP client.
Depends on how the deck is stacked in future.
The deck-chairs are still being stacked elsewhere, not just New Zealand.
Who is going to hit the iceberg next is still to be determined.
We are not immune from the World’s problems.
But and it is a big but….The world is our market place, so what happens to them happens to us all.
There are lots of big holes in the ground waiting on Capital.
Will it be yours?. or the BANKS.
For every borrower, there is a lender, who like to make money too.
December 7th, 2009 at 3:22 pm
@ John S:
I see Sore Loser has actually posted an excellent repost ahead of me. So I shalln’t labour the point, save to say that I have nothing but admiration for those who seek out the avenues of wealth, where ever they are found. My concern is that we now accept that wealth is the accumulation of money. I believe it has to be more than that. I do not read your post agressively, but enquiringly, ie: “What are your alternatives?” Until our Government encourages monetary , social and community reward for effort and learning, ahead of speculation on asset appreciation, I sadly have little alternative path for you.
And, yes, this IS an amasing country. It is up to you, me and SL et al to maintain that standard in whatever way we can.
December 7th, 2009 at 3:22 pm
@ SORE-LOSER Thank you. I share your sentiment. However, I must say that
“the day when our Politicians and Finance people can make that happen” does not make sense to me. Our countries are tenants of the central bank (The bank of England and its branches) for 250 years and longer. Inflation is not a mistake of global financiers but the will of a few powerful lending families.
For me, property is the only sensible place to work hard and develop personal wealth so I can look after my kid sister who is disabled. If you, or anyone else reading has a better, viable option I would be most relieved. However, if the road that you suggest is not one that you have traveled yourself please please do not join in.
Thank you.
December 7th, 2009 at 3:29 pm
@ Nicolas – certainly the reason I have chosen to purchase property is to make myself devoid of evil, quickly devaluing bankers notes.
Placing trust in the Government is not for me, because our government is made up of citizens just as financially uneducated as the rest of us controlling only the means to borrow more overseas debt.
The first step toward a successful country is making every person aware of what money is, where it came from and why it is so heavily devalued at our expense.
To my knowledge finacial education (and liberation) is deliberately left out of our children’s grasp.
December 7th, 2009 at 3:47 pm
You obviously well understand the issues that most property ‘concernists’ post here, John S. For what it’s worth, here is my concern:
In 1975 my wife and I bought our first home, a new 3 bdr brick veneer, for $33,000. We had a combined income of $11k. We sold that house to a nice Greek couple;who sold it to….etc.. and now an Asian family lives there. It last sold, 2006, for $738k. I doubt the new owners combined income is $246k. So; what are the chances the progression continues? At some stage, money creation or not; price escalation or not; our community debt assumption capacity MUST come to an end, whatever the nominal value of that debt is. Use any market whilst it is there, but…..
At this stage of my life we have chosen to try not to be the ones without a chair when the music stops. We are ‘going back to school’ to obtain the skills for the next adventure! And you think propertry is risky!
December 7th, 2009 at 4:00 pm
In 1960 a can of Coke cost 16 cents. I would estimate by 2015 it will cost $1.60
Ten times the cost. Yet the cost of coke production has come down hugely since 1960. The population demanding space in say, central Auckland, has gone up hugely. To me, with the perspective of constant inflation – your house of $738K makes sense to me.
The true madness is that your combined income (and everyone else’s) has not risen to the same degree. Call me a conspiracy theorist if you must, but I believe that is the modus operandi of the banking system we are governed by. We are already far beyond choosing the blue party or the red party to save us.
I bought a 3 bdrm house in Auckland last year with 865m2 land for $300,000. It is not out of the question for two people to earn $150K each. And lets face it – 1970s Auckland was a lot smaller in population than today. Location costs and so it should.
What will come to an end is the citizen’s ability to buy anything at all. But I doubt the banker’s would let that come to pass as the 30s depression was hardly a nice place for even the rich to live.
I think that property is the least risky option I have found after 9 years of reading everything I can get my hands on. As long as you never sell and instead use your equity.
December 7th, 2009 at 4:24 pm
I understand you thought process, John S. But here’s the last piece to my jigsaw puzzle for you.
It’s highly unlikley that a couple with a combined, let alone your single, income of $150k would be prepared to live in a $300k house these days. Somehow that type of thinking didn’t figure in the equation 35 years ago. One bought a house; lived in it; raised a family and worked to pay it off, and had enough left over for debt free living. It was never about enrichment. Anyway, times move on, thank goodness!
December 7th, 2009 at 4:54 pm
And yet many (95%) of those people instead sold their homes year after year. Borrowed heavily on their mortgages to finance holidays and nice cars and good schooling for their kids. Meanwhile the inflation raged in the background.
Those people who helped build this country will sadly, obscenely, be cramming into mass concrete baby boomer retirement homes. They will have gone their whole lives in most cases having never read one book on finance or the history of bank notes or good debt leveraging. They will have studied no successful self-made millionaires. But they will have sat down to the TV every night after work.
Things do change – and those that remain in the past doom their futures. The public education system was originally designed to produce soldiers and factory workers. Its time they taught us about money too.
December 7th, 2009 at 5:12 pm
It’s a bloody rort isn’t it John S….only the other day I asked for a thrupenny icecream and the lady said she didn’t have that flavour….just as well really because I was about to pay her with a 1935 mint coin!…
December 7th, 2009 at 5:37 pm
John S says @ 4:00pm
“In 1960 a can of Coke cost 16 cents. I would estimate by 2015 it will cost $1.60″
In 1960 coke wasn’t available in cans in New Zealand. Cents weren’t available either.
One could however buy glass bottles of it for sixpence. Seven pence “off the ice”. I’m not doubting you are an expert on everything John, but your research staff have let you down badly here.
BTW, a can of coke already costs $1.50, so are you saying you anticipate extremely low inflation for the next 6 years?
December 8th, 2009 at 10:28 am
@Pete – ah thats interesting (I came to NZ from London in 1996). The only info I could find on old coke prices were US$ ones.
Hopefully my point got across despite very inaccurate figures
I see pepsi has put their cola and 7UP in v. nice glass bottles again. I know its bad for you but glass-housed drinks taste way better!
I think inflation will continue growing like wild kudzu as usual and we’ll keep reminting our coins. $100 coins anyone?