Auckland's largest real estate company made its highest number of sales last month since March 2022, while the median price rose for the first time since March of this year.
Barfoot & Thompson managing director Peter Thompson said signs that the "heralded recovery" of the Auckland housing market is imminent can be seen in the high number of properties sold in August and the prices paid for those properties.
"August was the most positive sales month in the past 17 months," he said.
"Not only did the number of sales during the month increase significantly, the median sales price at $982,500 was up 3.4% on that for July."
The median was, however, still well down (-11.6%) on the $1,111,000 for the same month a year ago.
Thompson said against where the market has come from, August’s results are only "a modest step forward", but the level of buyer motivation was the best it has been for more than two years.
"Once the General Election is behind us, we can anticipate sales activity increasing and a good, steady market through to year end."
In August the company sold 879 properties, 20.9% more than in July 2023. The latest figure was also 22.1% higher than the average number of monthly sales for the previous three months and 52.1% more than the just 578 that were sold in August 2022.
The 879 properties sold in August is the highest since the 1180 sold in March 2022.
The average sales price at $1,088,457 was also up 2% on the $1.067.070 in July and up 0.9% on the $1,078,595 average across the previous three months - though down 6% on the $1,157,899 average in August 2022.
New listings for the month at 1577 leapt 30% on those for July. New listings this August were up 13.1% on where they were last August.
The 1577 new listings in August was the highest tally since November 2022, when exactly the same number were listed. To find a month with more new listings, you have to go back to March 2022 when there were 1994 new listings.
"At month end we had 4155 properties on our books, 1.9% more than at the end of July. Anything above 4000 gives buyers an excellent range of properties from which to choose," Thompson said.
The 4155 properties available at month end is, however, still well down on the average throughout 2022 of 4623.
The 21 properties that sold in August 2023 for more than $3 million was the highest number since May of 2022, when the figure was also 21.
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121 Comments
The dream is to build enough wealth to live the life of a beneficiary. But with nicer stuff and more choices.
Would it be the same if someone saved enough money to live off, but wasn't being productive with their time or surplus funds?
Is the dream over, or has it just begun?
"August was the most positive sales month in the past 17 months,"
Reminds me of the infamous scene from Glengarry Glenn Ross when Blake is sent down to deal with the sales deadbeats. Peter Thompson shall be filling like this as a boss right now.
Blake: You can’t close the leads you’re given, you can’t close sh*t, you ARE sh*t. Hit the bricks, pal, and beat it, ’cause you are going out!
Levene: The leads are weak.
Blake: “The leads are weak.” Fkg leads are weak? You’re weak.
so, will we see sales prices continue to increase if we see volumes of stock continue to increase? one wouldn't think a jump in new listings would see an increase in prices without a commensurate increase in buyers?
time will tell.
what are days-to-sell doing outside of auctions?
Appreciate this is AKL focussed, but my comment is re Wgtn- would love to see an article on likely impact on Wgtn of election. What has happened previously post an election when size of public sector likely to decline (regardless of result)? Appreciate there are a number of factors at play but Wgtn has a perhaps unique scenario vs rest of NZ here with cuts to public service size, potentially large ones depending on election outcome. Interesting too as Wgtn seems to have led the market decline and current levelling out trend.
They won't slash the public service in Wellington by all that much. It is big talk for electoral purposes. Comes round every ten years.
You'll note National aren't even targeting every dept. MBIE will get hammered. Kainga Ora too. But even then it will be 10- 15% at most. That will be enough for the Wellington haters.
Appreciate your thoughts. I just thought that the fear of losing job might be more widespread than perhaps any cuts actually are and so that might affect the market. Again, would be interested in analysis of historical data when public service shrinking post an election. Appreciate there are various other factors at play too, but this one seems like it would be interesting to dig into.
In my mumblety-mumble years in the Wellington market I've discovered it depends on who is in power.
A Labour-led govt is good for the local market, as they hire a huge number of people to weigh down chairs in depressing offices.
A National-led govt is also good for the local market, as they hire a huge number of consultants to lever people off chairs in depressing offices, only to take their place.
Other than that, I haven't noticed any correlation. However, there is a dizzyingly complex equation that factors in interest rates, media spin, and marketing budgets.
Haha, the '80s were my childhood. I paid attention to the market from the mid '90s (due to good advice) and bought in the early '00s. I know I had it easy, banks were throwing money away at the time and prices were starting to tick up, I think some people had mortgages over 100% LVR. I wonder what the link could have been?
When Nact win in October this is going to run away from us. Disastrous for FHB but may see more developments start.
Totally the reverse of what this country needs. My dream list.
- Stamp duty - 4% - on property sales.
- 39% tax on the actual capital gain from property sales - minus the inflation adjustment - over any term.
- Kiwisaver must have a 50% minimum non-housing local NZ investment outcome. (this one is a stretch lol).
- A significant (on the scale of the roads of significance programme) government programme of house building, re-create the ministry of works, build housing fabrication plants in appropriate parts of the country.
- A significant (led by BCG or similar) review of government and local building legislation. Start again rather than try and change the deeply dysfunctional current state.
- An immediate, time-boxed, review of our RMA and H&S legislation to reduce the obligations. Big changes required to meet productivity ambitions. Mostly I just want to stop seeing 100's of young men piss their life away sitting in a traffic management vehicle watching their phone as there is nothing to do.
Agree with your list although if a Labour-majority government failed to deliver on those fronts, there is no hope for NZ to ever move on from rewarding real estate speculation at the expense of its already-faltering productive economy.
This NACT-backed resurgence in house prices is only going to make things worse for the broader NZ economy, but few people are smart enough to understand that.
Leave if you are young and skilled or be treated as fodder to greedy housing investors in NZ. Everyone else in this country should prepare to pay more for everything from social services to power to food. The Bulletin: Senior doctors and dentists to strike this week | Sep 4 2023 | The Spinoff
yep just bought a 138sq 3 bed in Waverly for under 300k -- its tired and grotty but with brilliant 1950s bones and fully insulated -- large flat sub dividable section -- as i can work from anywhere three weeks a month -- the cost of a drive up to Auckland for a week in the motorhome -- when i can also see my kids and grandies for a few days is tiny compared with the benefits of not commuting 45 mins each way the other three weeks of the month -- best of all once i sell in Aucks -- no rush as on 2.99 fixed for 5 yrs with nearly three left - will be mortgage free and plenty of $$ to live large with !
Awesome! Good work. If you bought for under 300k there is virtually zero risk of the price dropping further id say. Well played.
It makes you think many of us should consider leaving Auckland. For 300k you can just about buy a discarded polystyrene cup at the end of your neighbours driveway. Your Waverley cottage is luxurious in comparison.
Fantastic choice. I see the housing price boom of the last few years as the biggest motivator of people shifting locations in NZ. Great to mix up different people and cultures to widen everyones views on key issues. South Taranaki is beautiful in it’s own regard and the people all look out for each other.
I think your first two bullet points will have the effect of increasing house prices in the long term, if not the short term. a 4% stamp duty, will just be be passed on to the buyers. in much the same way the GST is when you by your groceries.
As for capital gains tax (at 39%! CGT in other countries is typically 10-15%. The highest is Finland at 32%) this will effectively drop the already low number of listings being offered, driving up the price as supply drops. Also, most landlords rely on capital gains to make any kind of return, Rents usually only give you a 3-5% gross return. So a 39% CGT will be like rocket fuel to driving up rents. That will make it even harder for FHB's to save a deposit.
The road will lead to killing off the trading of estate. The lot you are born into will be your lot for life. There will be estate owning dukes and tax and rent paying serfs. Much like the Middle Ages.
4% stamp duty seems fair as a deterrent to using houses as an investment vehicle. They should not be.
39% CGT (less an allowance for inflation) seems fair on this unearned income. Firstly it is equitable against taxes on Labour (there is no reason income from capital gains is given special treatment) and secondly it is another steer for capital to move towards productive enterprises.
Will the 4% stamp duty apply to everyone, homebuyers as well, or just those who are buying as an investment?
And if capital gains is to be taxed on the same rates as a salary, does that mean I can write off tax on my depreciating house right now. If I earn 200k a year in my job but my house price has reduced by 200k this year I'll pay no tax.
Im actually all for the slow introduction of a 'nominal CGT. But a 39% CGT is dangerous - it will radically change how people operate in the market. I will never pay it. I just wont sell. When the time comes for me to upgrade my house I wont sell and buy a bigger house, i'll renovate and extend the existing one and not pay CGT. I won't be the only one. Listings will drop, prices will go up. CGT is only revenue at the sale. Avoid the sale, avoid the tax.
I think your first two bullet points will have the effect of increasing house prices in the long term, if not the short term. a 4% stamp duty, will just be be passed on to the buyers. in much the same way the GST is when you by your groceries.
As for capital gains tax (at 39%! CGT in other countries is typically 10-15%. The highest is Finland at 32%) this will effectively drop the already low number of listings being offered, driving up the price as supply drops. Also, most landlords rely on capital gains to make any kind of return, Rents usually only give you a 3-5% gross return. So a 39% CGT will be like rocket fuel to driving up rents. That will make it even harder for FHB's to save a deposit.
The road will lead to killing off the trading of estate. The lot you are born into will be your lot for life. There will estate owning dukes and tax and rent paying serfs. Much like the Middle Ages.
Indeed - watch for a bunch of MPs with multi-million dollar conflicts of interest changing up policy to benefit their own investments and those of their mates. A veritable ram raid on younger and following generations' wealth.
Of course, they'll still expect rental yield and price subsidies, universal welfare benefits, bailouts from floods and droughts, and monetary bailouts again come next hard times. Own two feet is for the younguns.
Could just be that as median price is used as an indicator, that slightly more expensive houses are starting to sell… as the vendors finally capitulate. Wait for the HPI that will give clearer indication. In my area virtually no sales have occurred in the higher priced houses, plenty at the FHB end I suspect as recent investors let properties go.
So, May down, June up, July down, August up, and that's recovery??
Seasonally adjusted REINZ HPI is a much more helpful indicator to track than a real estate company's marketing. Interest rates are still rising, and animal spirits don't increase lending capacity of property buyers.
In Auckland's glow, one month in bloom,
Spruikers grin in meeting rooms.
"See the charts?" they proudly say,
"One good month, we've won the day!"
"Every seven years," they claim,
"House prices double, it's always the same!"
A mantra repeated, without a doubt,
As if markets never face a rout.
But markets swing, as wise folks know,
What's up today might tomorrow go low.
Yet in their hubris, they've no doubt,
"One month's gain wipes all loss out!"
So let them toast their fleeting cheer,
For time may tell by the end of the year.
That is great return, over double even when you factor in inflation. It should be a really interesting few months to see where we are headed. If house prices are up again next month, real estate agents are going to be so desperately frothy, they're going to need a cold shower. Personally, I don't think we are at bottom yet though, 2 more years is my guess.
All these guarantees and rules of thumb are based on a few decades when interest rates have systematically fallen. I very much doubt they will continue to hold unless we go into negative interest rates or continue to have high inflation (in which case the real returns will obviously be much lower).
A sustainable recovery? - highly unlikely. Where prices are at this time next year is more important. We haven't had the downturn yet. Election year is a time when voters are more than likely lied to and efforts made to cast all Elephants out of the room....
If you're leveraged to the eyeballs and sweating your little heart out - its a great time to sell!
Ummmm, - that old argument again. Best answered as more than the average Landlord and those who are unfortunate not to have TD's? In times such as these it's a case of those who lose least, win most.
Again, we're comfortable with our lot and that's what matters. There is no need for greed to become involved.
Pa1nter, you seem agitated by others who are actually getting bankable returns right now - why?
I probably seem many things.
Money sitting in a bank accounts' probably the laziest thing I could do with it. Ok for a rainy day I guess, but I don't get excited by the rate going up, because it's usually relative to inflation. You seem to be over the moon by it, so that's good I guess.
The old market trick, get a crowd then have a few people in the crowd to start buying off then everyone starts buying and buy a load of crap for way overvalued prices. The Auckland housing market will continue to crash as most of the population cannot afford to buy from scratch simply fact.
If nothing changes and Labour get back in then you may be right.
If Nact win (which seems highly likely) then the mechanics of their policies will see life remain in this over-valued market.
Interest costs as an expense and no CGT means there is no other game in town. None. Diversify for safety perhaps (in fact probably) but given these levers (and I would add unrestrained immigration to this mix) everything else will underperform.
Yep. NAct are going to fire up the glass barbie and let her rip.
If RE doesn't go Pooh in the next year, expect a lot of narratives to change from "she's going down" to "she's all rigged". Duh.
Note I am not advocating what NAct are going to do, more that it's fairly predictable. Whether or not the economic climate is positive enough to support it might be another matter.
Or both the youth of this country, now largely dependant on their parents for longer (living at home, help with house deposit etc) and their parents themselves realise that the wealth of the few is at the expense if the hopes and dreams of the youth. Perhaps, and only perhaps, we will see people think of the next generation for once instead of themselves and what they stand to gain.
What are those hopes and dreams though? Our society and culture once took a much more linear, homogenous path, and that's largely eroded in favour of extreme individualism, at the cost of independence. People are now battling with concepts of identity and purpose, instead of the age old tradition of marriage, kids, a mortgage and retirement.
I think the kids will work out a new way, but each generation usually has its own battles to fight.
Or are you advocating some sort of standard of living, devised and underwritten by ones forebears?
How are NAct going to fire things up? At ‘best’ (or worst), the interest deductibility changes and allowing foreign property purchases over $2 million will provide a bit of support for the market.
I fail to see any policies that will lead to a strong rise in the market. In fact, freeing up greenfield housing development might be a (minor) suppressive factor in terms of house price inflation.
If they do something like throwing 50k grants to FHBs then we would be talking about firing the RE Bbq up again. I don’t think they will be able to afford something like that.
The cost of finance is the biggest factor, and save an economic calamity, unlikely to shift that much lower over the next 1-2 years.
Yes, and I talked in years.
So as a thought experiment - the local / global economy tanks in 2024. What stimulus could NAct actually initiate that would make a significant difference? I am struggling to think of any.
The RBNZ is a different story, and they are the key influence as always in terms of the direction of house prices. If the economy tanks then they may cut back to an OCR of circa 2% and that could stimulate the market. Provided unemployment was moderate….
What do you mean ‘lower the barrier’? Smaller deposits? That doesn’t get around the cost of paying a mortgage at current rates (or even 1% lower). In fact it makes it worse as the mortgage is larger.
It would need several things happening in tandem, with one of the key ones being the OCR dropping meaningfully ( at least 1.5-2%). If ALL those things happened, then sure we might see a little mini boom again from 2025/2026.
Until then it’s likely to be weak to moderate price growth (up to 3% per annum)
You were countering me, not the other way round.
I think if/when things sour, the OCR will be dropped, and the government will enact pro-investment/housing policy. There will be plenty of takers, if it's juicy enough. I can't tell you exactly what that policy would be, we can only guess.
Population growth.
Labour has started (incompetently). Nothing new about scamming, it's the level that is notably high - Lawyer: New Zealand has a major immigration problem on its hands (newstalkzb.co.nz).
Aaron Martin told Mike Hosking things kicked off when the accredited employer visa system began, and he's never seen this level of scamming in his 26-year career.
National will do it 'smarter' and not make the media nearly as often.
Jobs? Don't bother yourself with irrelevant details HM. The NZ taxpayer will sort out an existing house for them once they're here:
Last week, officials launched stings at six properties across Auckland suburbs that uncovered migrant workers being housed in filthy and unsanitary conditions.
The Herald was at a house in Lynfield during a multi-agency inspection when dozens of migrants from Bangladesh were discovered crowded inside the three-bedroom property.
Masud Alam, a legal executive and spokesman for the group of men, said each had paid about $20,000 for their visas and were duped into believing there were high-paying jobs waiting for them when they came.
They arrived about three months ago, but have yet to be given any work or pay.
In all seriousness, they are paying to come currently, and they will continue to come if they are allowed to under whatever false pretense works - just as has been the case for 20+ years. They will gain jobs by pricing themselves under the 'locals'. For example, work 60hrs, paid for 40. Being more compliant and often working harder no doubt too. Work 40, withdraw and give back to 'employer'. Pay for job offer - what these current ones have been doing but historically that was done to the NZ employer directly and by someone already in NZ. Unemployment will grow and that will include NZ residents and citizens that insist on following employment law with respect to pay rates and leave entitlements.
I do agree that a downturn will reduce demand from legitimate candidates, but for others (already here or otherwise) it will just make them more desperate and offer to offer even more favourable terms to unscrupulous employers. At this point I just wish we'd put a price of say 30k pa on a work visa and any business that complained about no staff could buy one and bring in whomever they wanted.
The logic in the housing market is super simple.
People needs a place where to live and the necessity of a roof is something that you can't reasonably opt-out from.
In case you "absolutely" need something you are ready to pay whatever you can.
Houses are bought mainly with debt, and "whatever you can" is more when debt is cheap and less when debt is expensive.
No more no less, look at the graphs. Even an idiot would be able to see the pattern.
Now.. try to imagine if we apply the same "free market" to water and air, or to any other necessity.
Many people should think twice before using the DGM acronym, before cheering for expensive housing, before defending the right of doing business with houses. Think of the same thing applied to air and water, seriously
20% to go yet.
On the back of nationals tax package a cynical con job I doubt they will make it into government.
They still haven't work out what lost them the last two elections wanting to run the housings market as a ponzi.
Now they want to go back down the same track read the room guys.
..I'm back after a wee break ....now sitting outside having a beer at a bar in Krakow, Poland..7pm here and beautiful ...people out everywhere and some tourists ...the city has the best tram system I have ever seen in the world ... and I look how housing is done here and sorry folks ...we have to STOP building OUT and build UP ...no EXCEPTIONS
The days of the 4 bdm 2 bth dbl gge are ALL over ...and the NIMBYS are just going to have to wake and get their greedy heads out of the sand and realise that change is VITALLY necessary !!
But WHAT will it take ? ...let's hope change is on its way ...otherwise the city is just going to get even more congested and unpleasant to live in.
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