There was no sign of the winter downturn at Barfoot & Thompson branches in July, with the number of properties sold up strongly although the average price was flat.
Barfoots sold 1388 residential properties in July which was the highest number since the summer peak of 1597 sales in March and put July's sales 41% ahead of July last year.
The average selling price was $827,359, which was a new all time high but only marginally up on June's $826,474.
However the median selling price dropped to $757,000 in July from $786,000 in June but was still the second highest monthly median ever.
The number of new residential listings the company signed up was flat, with 1777 new listings in July compared with 1749 in June and 1740 in May, but well ahead of the 1396 new listings in July last year.
However, the supply of properties available for sale remains tight, with Barfoots having 2802 homes available for sale at the end of July,which was the lowest number since December last year and well down on the 3273 it had available at the end of July last year.
"A stable average price over a three month period is a trend we have not witnessed for some time," Barfoot & Thompson managing director Peter Thompson said.
"The combination of high turnover and stable prices points to buyer confidence in the strength of the market at current prices but also recognition that property is fully priced.
"The last three months of trading also demonstrates that high sales numbers can be sustained without prices increasing.
"The first signs that price increases were slowing could be seen in last month's sales figures, and this month's results confirm that prices are no longer racing ahead."
Thompson said the number of homes the company sold in July was the highest of any July since 1999 and was also 4.5% higher than July 2003 which was the most active year for sales on record.
The company sold 411 homes for more than $1 million July but only 200 homes for less than $500,000.
Barfoot Auckland
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21 Comments
Median price is viewed as more accurate which is why REINZ use medians.
The key was volumes were up (highest in 15 years) yet median prices didn't rise. Typically higher volumes = higher prices. However this was not the case and is noteworthy. If Oct rules reduce volumes then one would expect further downward pressure.
http://www.barfoot.co.nz/market-reports/2015/july/market-update
So if volumes (supply) go up you expect prices to go up also? Contradicts most teaching where equilibrium is the balance between supply and demand but ok.
That aside the median price is the mid point of the range so volumes are irrelevant, all this data is telling you and is backed up by your article is that a higher proportion of lower valued properties were sold in July.
Now onto the comments about the October rules change. There may well be a reduction in volume as developers who buy and sell may be more reluctant to put properties onto the market and face the tax implications however this reduction in supply will only reduce prices if demand decreases more. Will it who knows?
Where I wrote "volumes" I was referring to the volume of sales NOT listings.
Volume of sales is not irrelevant - I suggest you do some research and learn what you are talking about.
Astute investors observe the change in sales volumes as these will "typically" help them predict future price movements. However this was not the case for July applying the B&T data.
Q. Why do you think real estate agents always tell you prices are rising?
A. Because they know when prices are rising (and they like to talk them up) their is also higher volume of sales which equals more commission for them.
Hence when turnover (volume of sales) is high, prices are usually rising. And in a flat market when it is difficult to sell a property (i.e. low volumes of sale), prices are usually falling.
So if October rules reduce the volume of sales then it would be logical to expect further downward pressure.
Q. Why do you think real estate agents always tell you prices are rising?
A. Agree with what you say but also because statistically they always are. There might be a slight drop here and a slight drop there but over time they always rise regardless, and providing you don't need to sell it is irrelevant what you pay for a property anyway.
September Higher volumes of sales lets say 1000 sales and a median of 700,000. On October 1st 3 houses sold in Auckland at 900k, 1m and 1.1m and that evening in the US theres a global meltdown and no other properties sell in the month of October. What has happened to the median price?
Thank you Triple.
" ...and providing you don't need to sell it, it is irrelevant what you pay for a property anyway."
So if there was a place in Glendowie available, cliff top 5 bed 4000m2 of land for $1m would you be interested, yes of course you would it's worth 6 or 7 times that. How about 10 years ago, possibly its about the market value. How about 20 years ago, no chance it's only worth 500k. If you had the foresight and the money then would you buy it?
Why it's peaked...
Chinese investment index
Mass market psychology
what the whales are doing
regulatory change
natural cycles
speculative plays don't work at these prices
and what a little birdy has told me regarding pending regulatory change re foreign buyers
Where to for prices:
Auckland peak already reached in 2015,
flat to falling trend through 2016 as people realise the parties over and start unwinding and regulatory changes and fear take effect
falling prices through 2017 and 2018 as correction plays out. Prices fall 10 - 20%. No more than 20% as that puts bank balance sheets under pressure and all stops will be pulled out to prevent that.
Although house prices remain strong and supply is still short, house prices have fallen by 15- 20% in US Dollar terms this year, 18% on the British pound even though house prices are on local currency are still strong. As the Kiwi depreciates against a basket of currencies the value of our assets become cheaper on a global scale.
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