By Bernard Hickey
Auckland's largest real estate agency group, Barfoot and Thompson, has reported sales volumes in February of 619, which was up 9.9% from the traditionally slow January, but down 1.1% from February 2010.
Barfoot and Thompson's figures are watched closely because they are the first to report sales figures for the month and the agency group is the largest agency in the biggest real estate market.
Barfoot and Thompson said average rents fell to NZ$402/month week in February from NZ$419 in January, although the average was up 3% from February a year ago.
ASB said Barfoots' sales turnover was up 9.7% in seasonally adjusted terms and appeared to show stronger market activity than indicated by mortgage approval figures.
"Auckland housing data for February showed encouraging signs in February, after several very weak months of activity," Tennent Brown said.
"The Auckland property market appears tighter than other parts of the country," he said.
"Low construction over recent years, combined with ongoing population growth, is supportive for the Auckland property market. Over the next few quarters, we expect nationwide prices to remain down around 5-6% from the 2007 peak, and only recover gradually in the years ahead. The dynamics of the Auckland market will likely lead to price lifts that are stronger than the nationwide experience."
Barfoot and Thompson said the figures showed a resilient market.
The average price increased increased 1.2% to NZ$521,887. See the interactive chart below with detail.
“In February, the average price and the number of homes sold were virtually the same as in February last year,” said Barfoot and Thompson Managing Director Peter Thompson.
“The number of homes sold in the month is on a par with the number we have sold at this time of the year for the past four years, while the average price is the highest we have ever achieved for the month of February," he said.
“Another positive factor is that during the last three weeks of February the number of sales agreements reached were higher than for the same three week period last year. You have to go back 12 months to find when this last occurred. It adds up to a housing market that, while turning over relatively modestly, is holding up price wise.”
'The sellers are back'
Thompson said a key factor in revived interest was a return of new sellers.
“New listings at 1529 were close to what we would expect at this time of the year in a moderately active market. They were also up 70.6 percent on those for January, but that month’s new listings were exceptionally low and this comparative figure is somewhat misleading.”
Thompson said sales across the region and in the various price segments were consistent with regular patterns. See a breakdown of sales data by region here at Barfoots.
He said Barfoots had 6,053 homes on its books at the end of February, 3.4% more than in January, but down 3.1% on February last year.
“The key to the market continuing to turn over modestly is new listings. There is not a glut of homes on the market, there are buyers out there and there is competitive mortgage money available. What remains tight is choice.”
Rents up a bit from year ago.
The average weekly rent in February dropped by NZ$14 a week to NZ$402 from January’s all time high of NZ$416.
“The fall in weekly rent was anticipated as the normal influx of people into Auckland over January eased,” said Mr Thompson.
During the month Barfoot & Thompson rented 817 properties, on a par with the same number as January and 112 more than in February last year.
Economist reacts
ASB Economist Chris Tennent Brown said the data was encouraging after several weak months.
"There was a strong pick up in new listings, but total listings remained steady (both seasonally adjusted), which suggests some sellers are withdrawing their houses from the market if they are not selling," he said.
There was currently 8.6 months worth of inventory on the market, which was an improvement on the 10.3 months recorded in October 2010 when the Auckland market appeared at its weakest. This is supportive of prices, which are steady compared to a year ago, he said of the Barfoot and Thompson figures.
The Auckland property market appears tighter than other parts of the country, Tennent-Brown said.
(Updated with ASB comment. Corrected month to week when talking about rents)
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