Big market share rise for Barfoot

Property

Barfoot and Thompson makes half all Auckland house sales in January

14th Feb 11, 4:39pm by Gareth Vaughan

By Gareth Vaughan

Barfoot & Thompson, which usually makes between one-third and 40% of monthly Auckland house sales, saw its market share jump to 50% in January as nationwide house sales collapsed to their lowest monthly level since the Real Estate Institute of New Zealand (REINZ) started recording the figures in January 1992.

Barfoot & Thompson sold 563 of the 1,115 houses sold in Auckland last month, giving it 50.5% market share. That's up from just 36.7% market share in December and 47% in January 2010 when the firm sold 583 properties.

It's the highest monthly market share achieved by Barfoot & Thompson in more than 20 years worth of house sales tracked by interest.co.nz.

Barfoot & Thompson managing director Peter Thompson told interest.co.nz he'd like to think the company's strong market share came about because its staff were doing a good job and people saw the real estate agent as the market leader. Typically the firm made 38-40% of Auckland house sales excluding Northland.

"It'd be fantastic (to stay at higher market share levels) if we can and that's our goal," Thompson said. "What we find is when the market gets tougher, we tend to do a lot stronger. When there are a lot more sales, then our market share decreases a little bit."

It was "disappointing" to see the overall sale numbers so low but Thompson said sales activity had shown more life in the last week to 10 days.

"Last week we sold 226 properties (and) when we compared it to the same week of last year it was 219," Thompson said. "That was the first time in most probably three and a half months that we've actually been ahead of the corresponding time the year before."

REINZ said on Friday there were just 3,252 nationwide sales in January, down from 3,666 in January 2010, the previous monthly low since REINZ records began.

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10 Comments

by Boatman | 14th Feb 11, 4:55pm 1297655726

Wow, this is not healthy .

Half of the now - collpased residential property market is dominated by one agency .

What hope does Mike Pero agencies have?

by Keyser Söze | 25th Feb 23, 10:58am 1677275880

blah blah

by Gareth Vaughan | 14th Feb 11, 5:44pm 1297658661

Interesting Keyser, cheers.

by hamrod | 15th Feb 11, 12:54pm 1297727663

I agree, really good Keyser!

I suspect that most people have no intention of forming anything better than a very short term view of market trends. The real estate industry would do well to start looking at the median sale price over a three month seasonal period or a rolling average.

I produce graphs for work using an excel macro I wrote to process QV sales data which shows the median sale price over a seasonal three month period with a yearly moving average trend line to smooth out the variance. Allows you to form a much clearer picture of where the markets been than what comes out of REINZ.

Your comments about the upper and lower parts of the market are on point with what I've experienced as well. The upper end has just stopped dead with vendors obviously not prepared to accept current offers but at the same time very few are in a position where they have to sell. I know people that moved away over a year ago who still have their upper end house listed for sale, happy to wait for the right price. As such in some higher end areas of the market the median sale price has infact rocketed up where only the very top end properties are still selling.

Far more people in the lower end are in a position where they can't afford not to sell and thus that area of the market has been hit much harder.

Very interesting times when different areas of the market are diverging.

by Keyser Söze | 25th Feb 23, 10:58am 1677275903

I'll go into it more but can't be bothered - I'll just wait for someone to say something that annoys me and I'll have another rant then.

by nzinvestor | 14th Feb 11, 7:09pm 1297663743

Three points:

FIRSTLY In this previous item on interest.co.nz

http://www.interest.co.nz/property/barfoot-thompson-report-december-pro…

Barfoots stated “December 2010 statistics are for the FIRST THREE WEEKS of the month, after which the statistics were closed off for the year.”

So were the figures for the last week of December lumped in with January Barfoots sales? This would distort the market share figure.

Mr Tarrant please ask Mr Thompson if he merged the last week of December with his January figures and in previous years did his December data contain figures for the entire month? December 2010 is the first time I have seen the statement “December 2010 statistics are for the first three weeks of the month, after which the statistics were closed off for the year” included in his press release.

SECONDLY

REINZ membership became voluntary in April 2010. REINZ state that only 94% of actual paid up members are now reporting their sales each month. So how many members do they have in January 2011 compared with January 2010. Could it be that they now only have 75% or 80% of real estate offices as members as at January 2011?

If only one large group is no longer reporting data in Auckland then this will make the data unreliable and of course Barfoots will look like they have a higher share due to the phantom sales that have not been reported.

The issue of REINZ membership and lower levels of sales being reported due to real estate companies deserting REINZ needs to be investigated by interest.co.nz. Comparing REINZ sales data with previous years is now pointless as the integrity of the data is compromised.

Mr Hickey – a double shot interview with the chief of REINZ please – questions need to be asked? Get right in behind the smoke and mirrors please!

THIRDLY

It is a breach of REINZ rules for a real estate company to use REINZ statistics to promote market share yet here we have the biggest player, being Barfoots, doing precisely that.

by Gareth Vaughan | 15th Feb 11, 1:52pm 1297731123

On the last week of December, yes B&T says those sales are included in the January figures but there are very few.

by Basel Brush III | 14th Feb 11, 8:24pm 1297668251

Perhaps vendors have been attracted to the slightly lower commission rates from Barfoots compared to the other thieves.

That makes sense for Pero to try an even lower rate for their new business.

However 2.95% is still nowhere near the rate that would sell more property. Maybe use it as a headline rate and incentivise for quick sales. The UK agents can sell using under 1.5% even with their "chains" in the contracts contracts.

by Gavin Jones | 15th Feb 11, 2:55pm 1297734942

Time to give credit due where credit is due. That is a tremendous achievement for Barfoot and Thompson. To get a 50% market share out of how many real estate licenses in Auckland? They must be doing something right. I say well done. Personally I have always enjoyed seeing Barfoots analysis of the market as they tend to just produce the facts from their month. Appear to be a straight up and down organisation that have stood the test of time and obviously know how to work the real estate seasons very well.

by Keyser Söze | 15th Feb 11, 3:47pm 1297738040

Firstly: I have gone back and had a look at my time series data, and without doubt can confirm that B&T's blip is just a statistical anomaly that probably relates to how they close out their transactions in their book. Why do I say this? Because in December 2010 Barfoot's volumes were 19.1% lower than in the previous year, vs. what was actually a really good month for industry (relatively), which nationwide was only down 11%. So this is just a classic bungy rebound - as any 1st year statistics major would tell you.

Second - the divergence between the top half and bottom half is really interesting. The bottom decile volumes are much, much lower than even in CY2008 (or FY09 March YE which many property guys watch). This is unique to the bottom decile only (maybe 2nd decile is on par) but this has had the net impact of bringing down the totals and giving the appearance the total market is much worse off than it is - like I say, mid to upper decile house volumes are actually doing okay and prices holding up.

I'll go into it more but can't be bothered - I'll just wait for someone to say something that annoys me and I'll have another rant then.