Barfoot & Thompson monthly sales surge 11.3% year-on-year; average price up 0.8% to $663k; median slips $10k to $590k

Auckland's housing market sales figures have shown no early signs of being restrained by the Reserve Bank's recently applied lending limits, according to the region's biggest real estate firm.

Barfoot & Thompson figures for October show that the company made 1203 sales in the month, which is up some 11.3% on the number of sales in the same month a year ago. Compared with September 2013 the sales were up 8.9% - though a seasonal rise would be expected at this time of year.

However, while B&T's not reporting any significant impact from the lending limits so far, high volumes of lower-end-priced houses sold during the month would suggest a rush by particularly first-time buyers who might have been getting in with pre-approved loans before the limits came into effect on October 1.

ASB economist Daniel Smith said the latest data suggested no overnight ‘chilling’ effect on sales volumes, "but the full impact of the restrictions will take time to emerge (for instance, there were likely many high-LVR mortgage pre-approvals still active in October). We do expect some impact on demand, and this, combined with a lift in listings, should see house price growth peak in late 2013/early 2014."

The median price of houses sold declined from the previous month's record $600,000 to $590,000. The latest month's median price is 8.1% ahead of the median for the same time a year ago.

However, in September, the $600,000 median was some 14.1% ahead of the year prior's figure - suggesting some moderating of price pressure in the past month.

Another key figure was that new listings during the month topped the 2000 mark (with 2016), which was the first time in over five years the monthly level of new listings has been this high.

At month’s end the number of available listings on B&T's books had increased to 3646, a 14.3% increase on those for September, and the highest number in the last seven months.

The figures tally with recently released Realestate.co.nz figures, which show that the serious shortage of available house listings - a contributor to rising prices - is starting to ease.

The Reserve Bank introduced its limits on high loan-to-value lending from October 1, mainly to preserve financial stability, but also with an eye to dampening the housing market - particularly in Auckland.

B&T managing director Peter Thompson said it could be up to six months before the market felt the full impact of the new mortgage lending regime, "and certainly one month’s experience is not enough to make judgements about the success or otherwise of the initiative".

"In the main October’s residential sales are the end product of activity that would have commenced in September or even August," he said.

The B&T average sales price in October was $663,123, which was up more than $5000 compared with September, or 08%. 

Thompson said this time of the year was also the peak selling and buying season as people sought to resolve their housing situation before the summer holiday break.

"The stand out feature of October’s trading was that choice increased significantly," he said, referring to the numbers of new listings..

"During the month we sold 457 homes for less than $500,000, up 20.6% on the number of homes in this price category in September, and such a significant increase in number may be an indication that a large number of first time home buyers committed to entering the housing market before the new rules took full effect."

"Sales in this price category make up 38% of all our October sales.

"Sales were also strong in the $1 million plus category, with 172 homes being sold at this level, the second highest number on record (the highest was in March this year when 186 homes sold for in excess of $1 million)."

The 12 month rolling increase in the average price now stands at 7.2% and that for the median price is an increase of 8.3%.