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

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%.

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16 Comments

Barfoot & Thompson average Auckland sale prices:
• January - $600,754
• February - $604,164
• March - $645,928
• April - $643,089
• May - $644,737
• June - $649,945
• July - $654,379
• August - $647,647
• September - $657,912
• October - $663,123
 
Clear trend. No action to stop it in sight.
SK.

The $10k decline in median price is a clear sign of price restraint at the bottom end of the market.

Try going back to school to learn about the difference between median and average.

Care to explain your reasoning? Or perhaps you learned maths at SK's school for trolls?
 
I figure that an increasing average price with a decreasing median price suggests the bottom half of the market is stagnant while the top end of the market continues to rise.
The bottom of the market reflects first home buyers, who we would expect to be hit hardest by the LVR limits. Hence I'd say the stats are entirely consistent with the LVR system working.

Average (or more accurately "averaging") is a technique, median is a particular method of averaging.

You can have weighted means, medians (eg (the top+bottom)/2 ), mode (most common), moving averages, geometric and weighted/moving geometric, and then their can be things like using the standard deviation or other ranging descriptions (which show where most of the value is in the sample) to create bands then calculate within bands to give better (or worse) decriptions of the initial data.

When you've got data that shifts over time (eg inflation) you have to be even more careful, doubly so when using bands as the top value of one band may shift into the next band - yet without allowing for this a shift of fractions of a percent in the top values will completely overwhelm larger movements at the lower end of the range, and likewise the opposite holds true where at the bottom it may appear to be large changes in yield, yet in reality they are only tiny changes in the whole model (bonds are a classic for this effect - small faster moving bonds look like they're jumping all over the place with the way the yields are shown, but often it's a storm in a tea cup)

This is a market place that has detached from the real world and real people - this is a speculative bubble. 

.08% increase in a month with very little expansion in credit is not a bubble, it is a sustainable increase.
Not even in the same universe as a dotcom/goldcorp/tulip style boom and bust.
SK.
 

It's not .08% in a month, it's 0.8%. You are out by a factor of ten.  
That's 9.5% annualised.
That is not sustainable.
In the UK they are worried about a bubble forming because they have 5% house price inflation.

LVR restrictions will take a while to really bite.  People buying now have existing preapprovals or are sub 80%.
On the coal-face I can tell you preapprovals are down about 20% on normal and down a lot more for first home buyers.
A lot of potential buyers are sitting back on the fence as demonstrated by the lack of confidence particularly in Auckland.
I'm finding that properties still selling but buyers finding it easier to get a property.  Client who has been missing out time and time again, finally managed to secure a place this week.
For every one of these clients that buys that is one less preapproval sitting out there.  As preapprovals run-down and the ones that are still in the market buy and exit, only then will we know the real impact on the LVR restrictions.
I think the restrictions are working and that will become evident in sale prices later in the year and early next year.
As far as preapprovals go, there is more going out of the "pot" than is going in.
 

Ok SK ... Leave you and your mates to it then ... But if you're wrong we all suffer ...

Houese are still cheap in NZ.
Compared to Sydney, Melbourne, London, HongKong etc.
There is no bubble.
The value is priced by the market relating to NZ being a prosperous, 1st world, democratic, with good government, English-speaking, good heritage of Judeo-Christian values/ethics, sparsely populated, good roading, good infrastructure, great tertiary education, good schools, great outdoor spaces, beaches, temperate climate, safe neighbourhoods, etc etc   -  this is what you are paying for on a global stage.
 
Anyone been to India, Russia, Cuba, Zimababwe etc lately?  They are not nice places to live (as a longterm native on a local income & local accommodation)
 
 
 

Houses (cheap) in NZ

Houese are still cheap in NZ.
Erm, not compared to a NZers income they are not. Fine if you are a millionare who doesn't need to work here though.
Compared to Sydney, Melbourne, London, HongKong etc.
There is no bubble.
No. When the average family has to live on WW2 style rations just to afford a roof over your head.
The value is priced by the market relating to NZ being a prosperous, 1st world, democratic, with good government,
Thats a real stretch on a good day. Our government is a joke.
English-speaking, good heritage of Judeo-Christian values/ethics,
No. Sorry. Not the NZ I have lived in.
sparsely populated, good roading, good infrastructure,
Erm, Have you been to Sydney, Melbourne, London, HK?  There is hardly any "infrastructure" in NZ.
great tertiary education, good schools, great outdoor spaces, beaches,
Perhaps.
temperate climate,
Can think of far better climates sorry.
safe neighbourhoods, etc etc   
Have you ever lived in south auckland?
 
Ok, I'll admit NZ has one thing going for it: living outside Auckland.  
Bit of a bugger if you need a job though eh?
 

unskilled nz-ers wages have no relationship to house prices
Houses are priced on a global stage. 

A sad truth MB. Some see it as a solution to our problems, others as a problem to our solutions.

I agree.... Auckland is a "Global City".....   Other countries are now talking about Foreign investment taxes.... 
Maybe our leaders will start addressing this problem....  when it is too late.
http://www.thisismoney.co.uk/money/mortgageshome/article-2394704/Foreign-investors-snap-70-new-build-homes-central-London.html
 
http://www.thisismoney.co.uk/money/mortgageshome/article-2480898/Osborne-mulls-capital-gains-tax-foreign-homeowners.html