Auckland's biggest real estate firm Barfoot & Thompson says its median house price for sales in June rose 3.5%, or NZ$20,000 to NZ$590,000 amid "unprecedented" demand for houses.
The rise has come on the back of an increasing shortage of available houses in the country's largest city.
B&T, which handles around 40% of all sales in the Auckland market says its available listings have slumped to an all-time low. This follows on from reports by Realestate.co.nz that nationwide listings are at historic lows.
The NZ$590,000 median price trumps the NZ$565,000 record Auckland median high reported in the May REINZ figures and suggests that the June REINZ figures probably out in about a week will show similar rises.
B&T's June average price reached NZ$649,945, an increase of more than NZ$5000 on the average price during May, but below the highest level on record, which was set in March.
Managing Director Peter Thompson said demand for properties was "unprecedented".
"...Competition is intense with homes selling within a tighter time frame than at any time in the last decade."
Thompson said that in June the firm listed only 1189 properties, while the sales for the month numbered 1059.
“This is the closest we have come to selling the same number of properties as we have listed in a month in the past 11 years.
“At the end of June we had only 2873 properties on our books, the first time our end of month listings have dipped below 3000 properties in the past 11 years.
The listings in June were some 29.5% lower than at the same time a year ago. The June figure was also 5.3% lower than the number of listings in May.
During June Barfoot & Thompson sold 380 homes for less than NZ$500,000, and a further 373 for between NZ$500,000 and NZ$750,000. A total of 144 homes sold for in excess of NZ$1 million, the same number as in May.
Property sales at 1059 for June was the fourth consecutive month that sales were in excess of 1000 for the month. The last time sales were this consistently high was nine years ago in the first half of 2004.
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33 Comments
Its been a bubble since prices went past the 3 to 1 price to earnings ratio.
So act harshly sends us into a bad recession? which collapses the housing bubble? what then?
I agree the RB is behind the curve and badly now but trying to judge ppls future stupidity/greed/desperation is a big ask...
regards
Yes....though I see the banking instability is an after-effect really, ie rising rates cause financial stress, spending reduces, increase un-employment housing bubble pops, nasty drops, say 10~15% makes the banks insolvent, staff laid off, manufacturing output drops..more contraction...
Thats really what worries me, getting a self fullfilling neg spiral you cant break out of.
Really its the fault of good old HC and Cullen...they failed NZ miserably on the housing front IMHO...
regards
I am not an economist, I would never pretend to be one. I consider myself to have lots of commonsense however and right now my commonsense tells me that this rising house market has to be unsustainable. Stockmarkets also seem to be rising worldwide. I remember the 80's and it seems that everybody is partying like there is no tomorrow just like they did back then. Fun while it lasted but the hangover goes on for a long time after.
You people never fail to amuse, I'm sure if I found the time to go back through your posts I'd find dire warnings and talk of a imminent crash every month back to the 1990s. You were wrong then and your wrong now, this thing is only just getting started (in Auckland at least).
Steven, the price to earnings ratio is a antiquated measure for reasons which I've explained in the past.
The rule of supply and demand people, look it up. In a normal property cycle values double approx every 12 years, considering the supply shortage in Auckland we'll probably see prices doubling in half that time.
Agree with your thought Happy123.
House prices were pretty flat for about 7 years. I reckon there's quite a bit of catch up going on to get back to 'average' sort of increases. Plus immigration is turning up plus... it's all happening after a number of years of well below normal numbers of new house building.
Your supply and demand is absolutely correct.
The P/E shows a bubble and a risk of a significant correction. In your opinion its antiquated, not my opinion. I want a return on my investment and not a gamble the investment will go up in value based on the assumption of a bigger fool.
One day you'll find the biggest fool was you.
regards
Check out my previous posts. I'm saying this is what I think will happen, not what I want to happen. I'm not so naive to think that if my house is valued at 100k more that I'm 100k richer.
Only way to get ahead in a rising market is to own more than one which I don't.
It was directed at kimy/sk/big daddy actually.
I think of it as a plane stall, the higher the nose goes to gain height the closer to a stall. Up we go but the air gets thinner and colder, the engine produces less power and the prop bites less....the plane gets slower, controls un-responsive, ice builds, stall speed gets higher...at some point the palne speed and stall speed will meet, its inevitable....IMHO.
regards
Ok, it's a housing boom, we know that. So can we talk about something else that requires tons of money? Like this
I'm so sick of ' property, housing, bla bla '. Can we have some adult conversation please. You have a captive audience and its the same stuff everyday. Why is no one discussing about the US debt, the Feds, Bond Market??
Can someone teach me how to invest in dividend stocks or invest in Dairy. The whole houseing thing is such a bore. Can we have some balance back please??
Moa Man, don't you realise... so much of interest.co.nz is really, in truth, all about property.
Main man Bernard writes so many of his articles about property. He is fixated with it. He keeps coming back to it.
And there's a good reason... it generates traffic to the website, and comments.
Sorry mate but the articles about property ain't gonna go away.
I always chuckle to myself... a website full of bloggers who (mostly) hate property, and all they talk about is property.
Dividend stocks, check out this page:
http://www.topyields.nl/Top-dividend-yields-of-NZX50.php
But beware, the companies paying the highest dividends tend to be doing so because there has been a spectacular drop in the share value recently (eg Chorus). I would take your pick from this list then use a online broker to have a look at what the share price has been doing. All of the big 4 banks have onlnie trading platforms that are free. A few good slow and steady stocks - Infratril, F&P Healthcare, TradeMe and Sky City.
Invest in dairy, as far as I know there are only two options on the NZX, the Fonterra Shareholders Fund and (in the not too distant future) Synlait. Interest.co.nz did a good article on Sylait's upcoming IPO earlier this week and there was a great comment from a reader too. Fonterra fund is a great, safe earner but you'll pay a premium for that safety. Big movers on the NZX in the last year have been the tech companies, Xero and Diligent, if I were you I'd be looking at some of the tech newcomers to the NZX like SLI.
Why is no one discussing about the US debt, the Feds, Bond Market??. Heaps of articles on here about all those things?
The latest residential building consent figures published by Statistics NZ have been touted as heralding a national recovery. But a closer reading shows that while nationally consents for new houses in April hit a new five-year monthly high, much of it on the back of Christchurch's recovery, the figure for Auckland for the same month was down.
For the year ending April 2013 the result was even more disappointing: we built just 3971 houses compared with 4600 the previous year - which in itself was a 30-year low. Auckland Council's target of 400,000 new homes within the next 30 years requires an average of 13,000 a year.
Unless the pace of building picks up massively existing house prices will continue to rise.
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