Auckland's dominant realtor has reported its weakest month of sales transactions for four years in December 2022.
Just 527 properties were sold in their system in December, the least since the 474 sold in February 2019 (apart from the May 2020 lockdown month).
That caps a tough year for them. They sold just 8469 properties in 2022, their lowest full year total since 2010 (when they sold 7987 properties).
Half (51%) of all Barfoot transactions were in the $1 mln to $2 mln price bracket in December, and another third (32%) in the $750,000 to $1 mln price bracket. Sales over $2 mln accounted for just 37 of their 527 December sales or just 7%.
They report that "vendors have become cautious about accepting what they consider to be too low an offer". But they also reported they ended the year with 4664 properties on their books, more than 40 weeks of sales at the current sales rate. The last time they had that sort of overhang was in December 2018.
The fewer sales are to buyers willing to match seller price expectations. The median price remained at $1,067,500 in December, little-changed since September and only -4% lower than the 2022 average median of $1,117,000. Prices aren't shifting because transaction levels are so low.
As 2023 progresses, whether vendors who have to sell can hold on to 2022 price expectations will be interesting to watch. Prices are set at the margin, and if those who have to sell (via death, divorce, relocation, etc.) start to dominate the market when sales volumes are low, then the averages and medians could start to move.
Some investors who get their 2022 tax bills in 2023 after the limits on deducting interest costs start to bite may also reconsider their options. Rising interest rates will make the pressure tougher. (They can no longer deduct building depreciation either.)
There are about 600,000 dwellings in Auckland. REINZ reports that about 21,000 dwellings will change hands in Auckland in 2022. That means about 3.5% of houses sell in the year, and these transactions will tend to set the market price expectations for the other 96% that don't come up for sale.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.