Barfoot and Thompson says house sales drop in Sept from Aug; 1st year since 2007; Average sales price up 3.2% as top end properties sell well

Barfoot and Thompson says house sales drop in Sept from Aug; 1st year since 2007; Average sales price up 3.2% as top end properties sell well

By Bernard Hickey

Auckland's largest real estate agency group, Barfoot and Thompson, has reported that sales volumes dropped in September from August for the first year since 2007, but it also reported a 3.2% rise in the average sale price over the month to NZ$547,883.

Barfoot and Thompson said it had pulled forward its Spring marketing programme so as not to clash with the beginning of the Rugby World Cup. 

It said it had seen strong activity at the high end of the market, with 17% of sales in dollar terms coming from homes sold for more than NZ$1 million, "a far higher percentage than normal."

The figures from Barfoot and Thompson are the first released for September and are closely watched given it sells around 40% of the properties in the country's biggest market.

Barfoot said it had sold 6 homes for more than NZ$2 million and an extra 45 houses for more than NZ$1 million.

Barfoot reported selling 1,263 738 houses in September vs 758 in August. This was the first fall between August and September since 2007, when sales dropped to 765 from 899.

Sales volumes in September were up 4.9 7.1% from a year ago, although this annual sales increase was lower than the 19% annual sales increase seen in August.

The number of sales over NZ$500,000 was 334 or 61.3% of sales by value, up from 267 or 56.2% of sales in September 2010 and 50.5% in September 2007.

Barfoot and Thompson credited the earlier promotional activity for the boost in the average sales price, which was up 4.6% from a year ago.

“This represents a significant price increase given that for the past four months the average price moved no more than $2000 from $529,000 to $531,000," Barfoot and Thompson Managing Director Peter Thompson said.

“Traditionally prices rise at the start of spring, and in anticipation that the hype around rugby might interfere with our normal spring promotions, we brought our marketing campaigns forward by a month. Certainly as a result of that a number of sellers actively sought to list earlier than they might have otherwise done," Thompson said.

 “In September the top end of the market was extremely active," he said, adding the majority of the high value homes were sold in the central city, eastern suburbs, Devonport and the North Shore beaches.

“You have to go back to March (when the average selling price peaked for the year at $581,000) to find a higher average monthly selling price."

Thompson said the sales for the month were in line with the number sold for the last two months.

“We continue to sell more homes on a monthly basis than we did last year, but sales numbers have remained in a tight band between 778 and 738 for the last three months," he said.

New listings at 1,263 were up 5% from the same month last year, but were down from 1,282 in August and down for the first time in this month since 2007.

“New listings remain tight and at the end of the month we had only 4798 homes on our books, 36 more homes than last month’s number, which was our lowest on record for four years.” 

See more regional detail on sales and prices here at Barfoots' site.

(Updated with more interview with Peter Thompson, details, figures, corrects sales numbers)

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How statistically surprising! The sales volume is down, and the mean average is up, because there are more people SELLING their expensive houses. Someone, for example, who sells their $5m house and buys a $3m one, to downgrade, effects the figures ‘positively' on both transactions, even if they originally paid $7m  for the first one. Of course, we don’t know this is the case…but why would someone sell an expensive house, if they thought the price was going to rise? 

Oh how cruel of you NA to blow a hole in their wee bit of media hype...tisk tisk.

Easy answer Nick, cause they are over leveraged and its gettting painful, esp as the cost of money is going to rise with all of the downgrades that are in the offing (4 pillar banks) and active (Italy, NZ, US)

Ah..., I see. So even if they think the price is going to go up, they have to sell because their debt is too much and they can't afford to keep what they have or rent it out to make the figures balance. Sounds like an action that is going to affect more then the high end sellers, to me ( sarcasm tags...off)

There are more properties coming on the market.

The spin says there should be more buyers.

The reality is that the buyers will stand off and wait, particularly as no one has to buy these days because of rising price pressure.

Nice opportunity to wait in the wings as a buyer.

RWC and election out of the way will see the truth told.

Recession has already arrived in the US.

Called by ECRI (Economic Cycle Research Institute) who are a conservative research organisation that rarely makes hysterical calls.  The video on the front page is an interview with CNBC.

http://www.businesscycle.com/

No doubt the headwinds for NZ are about to get worse as this feeds back through the supply chain to China and therefore Australia, two of your biggest export markets.

Edit:  the above link is the Bloomberg video, this is the CNBC video:

http://video.cnbc.com/gallery/?video=3000048636

Yep, this website is getting too boring and tired.  Interestingly, you get (almost) the same comments here and the Labour's Party Red Alert blog.. That said it all really!

Not Uber-cynic, Animal lover, but Realist. Unblinkered, realist.

Tell me: Which bit of the New Zealand economy that stimulates the propety market is going in the right direction:

  • Interest rates are down - that's lack of demand for debt- and merely delaying hardship.
  • More listings are coming to market than sales.
  • Unemployment continues to rise, from what I see in the daily press.
  • Wages continue to stagnate.
  • Living costs continue to rise.
  • The global economy contiues to do whatever-it-is-doing, but doesn't appear to be good.

Which bit, apart from optomistic vendors increase their 'Asking prices' is good for the property market?

The good bit St. Nick is that the National government hasn't cracked down seriously on the tax advantages of negative gearing to own rental houses . Their ineffective ( and idioticly misplaced ) targeting of the depreciation allowance shows them to either be half-hearted in their attempt , or simply incompetent .

... the volatile of equity markets world wide , and the ham-fisted way that Mark Weldon runs the NZX , discourage investors from the sharemarkets .

And there's always the possibly of " hot " money entering the market from China . Some " chump change " from them would be enough to send our property market surging again .

I'd say that there's still plenty for the likes of Uncle Ollie & BigDaddy to crow about .... .. sadly !

Hot money from China.

1.  I think we have already had it after they tightened up their ownership criteria at home.

2. With the downturn there and smaller business owners having no  access to bank finance,hence going to expensive money, the chances now are that some of them that came here wish they had not done so and will now want to get some of it out again.

Try that one for a theory.

And you know what, Roger?. I live in unblinkered, and possibly naive and futile, hope that when JK gets back in ( there isn't a question of that at this late juncture) National may set about finishing the job on taxation reform. Gareth Morgan Big Kahuna we 'aint; going to get. But unless JK sets about a serious re-balancing of the economy, 'he' will have no economy left to take advantage of. It's in 'their' own interests to alter the tax balance of our economy. 3 years notice time has been given for those who need to get out, to get out. The higher end properties aren't selling, even at this late stage, for no reason.

Agreed , St. Nick . The question I pose is , does Jolly Kid have the Kahunas to attack the seriously dopey economic policies of the last Labour government ? .... will he un-Cullenise the economy , or will he just tweak and tune , and continue to place creedence in Treasury's wildly bullish prognostications .

.. .. NZ has one ace , we produce soft commodities , and it's a hungry world out there . But let's not blow that advantage in the same manner that the UK blew it's revenues from the North Sea petro-carbons bonanza .

... bonanza ? ...... where's Hoss and Little Joe when you need them !

Lorne Gone ( wasn't he, Pa, or was he a diferent colour?)... JK must be into his ultimate term. He's 50 now, and 6 years at the top of any job, takes it out of you ( he's looking a might grey around the gills already). So my hope is that he takes the... 'Stuff it. I may as well go out with a bang as a whimper' view, and bring in all the bits he hid under the guise of 'not in my first term'. Actually...I get less optomistic, the more I type! But, hey, I'm not one for giving up on a view easily ( as Animal lover pointed out to me this morn, on my property hobby-horse)

You'd never reach the same conclusion from reading this article verses its sunny equivalent on the nzherald.

Nicholas: A friend of mine sold their house with Barfoots for just under 2 million in the period refered to and it was debt free. They sold simply because family was moving on and they felt like a change! Not everyone with an expensive house is up to their eyeballs in debt, in fact quite the opposite is often the norm.

Nick A, you seem increasingly shrill in your protestations about the property market.

The houses I own earn me more and more rent as the months go by.

Where is this collapse you talk about? I'm  getting tired of waiting.

I'm not getting tired of waiting - I'm enjoying record low interest rates, record high rents, and record high prices!

184 pages of houses for sale in Auckland Central in the latest Property Press.... market must be hot...