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Barfoot & Thompson had its best April sales since 2002 - average selling price above $1 million for seventh consecutive month

Barfoot & Thompson had its best April sales since 2002 - average selling price above $1 million for seventh consecutive month

April was another ripper month for Auckland's largest real estate agency, Barfoot & Thompson, which notched up a near-record number of sales for an April month, at record prices.

Barfoots sold 1107 residential properties in April, down from 1844 in March but still the most properties it has sold in the month of April since 2002.

Sales in April last year were affected by the COVID Level 4 lockdown, however in April 2019 the agency sold 667 residential properties.

March is usually the busiest month of the year for real estate, so the decline in April was not unexpected as the market turned towards winter.

Both average and median selling prices set new records.

Barfoot's average selling price in April was $1,114,054 making April the seventh consecutive month that the average selling price was above $1 million.

The median selling price was also at an all time high and above the $1 million mark for the third month in a row at $1,050,000.

New listings were also running at elevated levels with the agency adding 1675 new listings to its books in April, down from 2138 in March but up 41% compared to April 2019.

"April's trading was excellent with prices edging slightly higher, strong sales and a solid level of new listings," Barfoot & Thompson Managing Director Peter Thompson said.

However he was equivocal on what effect the Government's recent moves to changes tax rules for residential investment properties would have on the market.

"Some will read into the sales data that the market was barely affected by the Government's March initiatives, while others will see signs that the changes are slowly having their intended impact," Thompson said.

"Overall, the market is continuing to trade strongly.

"There is still a high level of uncertainty as to future direction, and this sentiment is likely to remain until any announcements about housing in May's budget are fully absorbed," he said.

Barfoot Auckland

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25 Comments

Another record broken....and Mr Orr is STILL accessing...is it not enough .....and......he like a school monitor is asking everyone to behave despite his policies shouting/ prompting speculators to go out and party by using the deadly cocktail of low interest rate and interest only loan.

May be he was waiting for winter data in April that is normally softer than March but now as no news and data to suit his purpose ( INFACT PONZI TOUCHING NEW HEIGHT) is changing the goal post, hoping to get an excuse that he may reason to not act.

He is giving a warning - FOR WHAT and does he expect that investors will deter from buying OR will his warning prompt people to rush to buy just like it happened before reintroduction of LVR.

This data from Barfoot is after the so called housing policy announcement by the government and reintroduction of LVR....STILL Mr Orr is accessing and doing what...warning ....

Strong (Un)employment data coming thru , to support rising house prices.

No. Low unemployment due to covid stimulus and bank created credit. Which is unsustainable.

Barfoots website shows that April 15 sales were 1070.
April 2021 were 1107. An increase of 3.4%
Not v impressive when you take into account the current level of interest rates compared to 2015 plus the increase in stock (always not mentioned)
April 19 they sold 667, so today's figures are up 66% on that. March comparison with 2019 shows sales rose 91%
Rate of increase is slowing. Despite March being last month investors could get their interest deducted on new purchases.
In December 20 Barfoots sold 1479, compared to 504 in December 18 (up 193%)
So, the 2 year comparison series (to avoid 2020 lockdown inaccurate comparisons) runs:

Dec: up 193%
February: up 137%
March: up 91%
April: up 66%
Peak of mania was evidently in December 2020.
Sales are cyclical and a LOT fewer were sold 2017 to October 2019 than in the previous 3 years.
Vendors wait til prices rise enough to make them feel enriched for sale
Then when the prices stabilise, the market goes back to sleep.

‘Vendors wait til prices rise enough to make them feel enriched for sale
Then when the prices stabilise, the market goes back to sleep’

Your final sentence really hits the spot I think.

"Both average and median selling prices set new records"

So:
- It's not the foreign buyers (twice as many houses sold than bought over the last year)
- It's not the investors (LVR 40%, CGT extended to 10 years, end of interest tax deductibility)
- It's not supply and demand (record number of houses built and a drop of 90 % of immigration)

When are people going to realise it's just the low interest rates? The easy way to fix it all is to set the OCR back to pre-covid level of 1% (a rise of 0.75% from today)

In terms of stock available for purchase (rising each year) sales are not at a record.
Interest rates were higher also in 2015.
There is a supply and demand problem, yes, but it is one of number of sellers v number of buyers.
When prices rise enough, get a lot more vendors seeking to cash in who had been sitting on sidelines waiting for price to be high enough above what they paid (profit)
Buyers have increased at same time (more than number of vendors) due to lower rates, agreed.
But the two phenomena overlap, causing some confusion.
In addition, the mix of buyers and sale method (investors at auction with more leverage and borrowing capacity than other buyer types) drove prices up MORE than low rates did.
We are not informed by any source (if available) how many properties are bought on mortgages and how many outright, with no debt.

The number bought outright is likely a function of annually increasing inequality of wealth, which feeds on itself, especially in times of high QE.

So, it is not as simple as lower rates = higher prices as a linear causation

When are people going to realise that people already realise that interest rates are a big part of the equation?

If cannot raise interest, why are they not targeting Interest Only loan as it is one tool that is used by speculators to multiply their purchasing power.

May be for this very reason not stopping it (should be allowed in emergency situation but not for new application) .

Another excuse is that even if they plan to introduced will be not before six months, why can it not be done the wat tax changes were done. Stop new application immediately and give time to existing people on interest only.

Because forty percent of landlords are insolvent...

They can’t repay the loan

Do they know that? I.e. I know that I'm insolvent but will push forward as a going concern?

people stuck at home or unable to travel overseas have more time to contemplate how much thier lives would improve with more garden and an Extra bedroom.

I don’t think they’ll ever realise it’s just extraordinary low interest rates and the availability of credit driving the demand. It’s been the case since the gfc. We are not special, masses of people are not going to move here and the build quality and materials used in general are dreadful. We are fed narratives by MSM in support of their advertisers which sadly most appear to believe.

RBA report.... Introduction sums up their findings. ( very much worth reading ) https://www.rba.gov.au/publications/rdp/2019/pdf/rdp2019-01.pdf

These key relationships include:

a) Interest rates, income and housing prices have strong and clear effects on residential construction.

b) Dwelling completions and changes in population explain the rental vacancy rate.

c) The vacancy rate has a strong and clear effect on rents.

d) Interest rates, rents and momentum have large effects on housing prices.

e) Housing prices and construction are mutually determined, so examining bivariate relationships in isolation can be misleading.

Referring to "records" when not defining numerator and denominator is lazy and misleading.
More stock each year for last 8 years, lower interest rates, more people, so comparisons that do not control for these inputs are hot air.

"Record average and median price" is simple to understand, you pay more for a house, period.

Desirable areas will always be in demand.

OCR march 2016 was 2.25%
Today it is 0.25%
An awful lot of interest not having to be paid that was to be paid 5 years ago.
By way, Interest today showing REAL interest rate is minus 1.15%
10.8.16 it was plus 1.83%

So, people might stop speaking about fear of negative real rates: already here.

Unemployment negligible and falling.
Inflation rising.
Debt no where near what was thought it would be.
Interest rates have to stay negative?
Only 3 years that cuts in interest rates were merited in economic terms in last 22 years, was 2001 (Dotcom bust) and 2008-09 due to GFC. Rest of cuts pure Ponzi pumping

Re: Build Quality... We went to an on site inspection of an E-Haus on Saturday in Onehunga. Cannot overstate how impressed we were by their build quality. There were several people there from Europe, UK and US who’s eyes lit up and faces cracked into big smiles when the window demonstration took place. They were incredibly well made proper German manufactured windows which bare no comparison to the pretending to be double glazed windows that are standard here. If you are intending to build then I highly recommend you go and talk to them. They design and build your house for the climate conditions on your plot. Truly amazing.

Real windows. What an amazing dream.

They look pretty good. What's the build cost like?

I don’t know what the build costs are as we were only there for an hour. They did explain though that they work to your budget. So rather than saying I want a 300 sqm house you tell them what your budget is and they design and quote based on budget.

Looking at Interest co nz figures for rents, they seem up (median) by 20-25% in last 3 years?
Wages are up 5.7%

" This means that house prices adjust over the long term to keep the cost of owning a home close to the
cost of renting"....
https://coolabahcapital.com/wp-content/uploads/2021/04/Research-CCI-RBA-...

April 2021's Auckland median price based on B&T is not a outlier based on B&T's own YOY₉ and MOM₁₀₀ data.