Barfoot & Thompson's sales volumes rose but prices were lower in May

Property

Sales activity was up at Barfoot & Thompson last month although prices eased slightly for the second month in a row

6th Jun 18, 10:39am by Greg Ninness

Sales lifted at Barfoot & Thompson last month although prices dipped slightly for the second month in a row.

The company, which is Auckland's largest real estate agency by a substantial margin, sold 1027 residential properties in May, up 40% from the 731 it sold in April and up 16% compared to May last year.

It was only the third time in the last 20 months that Barfoot's sales have exceeded 1000.

However prices headed in the opposite direction, with the average selling price dropping for the second month in a row to $918,465 compared to $930,223 in April and $931,292 in March.

In May last year the average price was $942,717.

The median price also dropped for the second month in a row to $820,000 from $830,000 in April and $860,000 in March.

In May last year the median price was $846,000.

Barfoot's record average price was $968,570 set in March last year while the record median price was $900,000 also set in March last year.

"The hand brake that was holding back buyers eased in May and it led to higher sales volumes across all price bands," Barfoot & Thompson managing director Peter Thompson said.

“It is the second consecutive month that sales numbers have exceeded their equivalents in 2017 and a further sign that the market is coming out of its 12 month hibernation.

“The prices in May eased, with the average at $918,485 falling to its lowest level in five months, although this price was less than one per cent lower than the average for the previous three months.

“The median price of $820,000 was at its lowest for three months and down two per cent on the average for the previous three months.

“At current levels buyers are demonstrating confidence that prices have likely bottomed and vendors are recognising the market is not going to rebound to levels higher than those of 12 to 18 months ago,” he said.

The company signed up 1455 new listings in May, up 7% compared to April but down 16% compared to May last year.

And buyers should still have plenty of properties to choose from, although the total number of homes Barfoots had available for sale dropped for the second month in a row, to 4568 compared to 4678 in April and 4814 in March. However, May’s total stock was still up by 6% compared to May last year.

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Source: Barfoot and Thompson

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44 Comments

by PitU | 6th Jun 18, 10:47am 1528238843

Our West Auckland property I sold end 16 has gone down in value 18% - why is this not in the news? (sale price vs. trademe estimate which was spot on when we sold it)

by Averageman | 6th Jun 18, 2:16pm 1528251382

Interesting. This would line up with what many expect to be happening outside the leafy burbs as price paid for fringe stuff by investors was crazy.

A lot of outer ring (concentric ring theory) properties are leveraged against the equity of a central leafy burb. Will unfold slowly as mortgages come off their time and banks review things more carefully than they have in the borrowing frenzy of the last ten years. Lets hope that the Banking Royal Commission in Aussie continues to expose the poor/illegal practice of this sector. Couldn't impact lending here....could it?

End of the day, as real equity declines, borrowings stay static. Access to credit/refinancing will be everything.

by Nic Johnson | 6th Jun 18, 10:59am 1528239589

'Barfoot's record average price was $968,570 set in March last year while the record median price was $900,000 also set in March last year.

'The median price also dropped for the second month in a row to $820,000. The average selling price dropping for the second month in a row to $918,465'

So Median price has now fallen $80,000 since March last year and the Average by around $50,000 all that while the press have been trying to lure FHB's (I hope that is the correct terminology Chess) into the market and no national reporting about the collapsing market - After all it is ANZ home loan adds that sponsor free TV in new Zealand after all. What happens if the country and the FHB's find out about all this? Pause, Panic, Collapse? And the banks haven't even started to make life more difficult yet. 40-60% off from top to bottom would be a bold call, but I'll make it.

by mfd | 6th Jun 18, 11:04am 1528239848

The data is quite noisy so I don't think it's fair to take the absolute peak as representative of anything. It certainly looks like the price has been on a nice gentle decline for a while now, though. Long may it last.

by Pragmatist | 6th Jun 18, 11:49am 1528242593

Will be interesting to see if it stay on a gentle decline or accelerates in the downward trend. I suspect there is enough of a supply & demand issue that a long gentle decline could be maintained, as prices "consolidate". A steady trickle of FHBs enter the market as prices get slightly more attractive. But any external shock or tightening of lending from the banks and it could start to look like a kamikaze dive .

by Nic Johnson | 6th Jun 18, 12:47pm 1528246067

It will be interesting Pragmatist. Lies Damn Lies and statistics someone once said..
What we have seen so far has occurred in an environment of continued relaxed lending (see car sales last month) and very poor reporting. The vested interests have hidden the reality from the general public through the submersion of monthly data in annualised figures. Most Aucklanders probably have no idea that the median price is close to 10% off its March 2017 peak and will get there next month. All they have been fed is reduced rates of annual growth nationally, but no mention of declines or falls of this magnitude. The banks, who sponsor the press, and the real estate agencies who hype the stories, have so far had their positions hold sway.. There is also little reporting of the Australian housing market woes, Royal Commission etc and Banking malpractice.. So for the majority of BBQ loving kiwi's whose news is STUFF and TVNZ... they have no clue what has really been happening. Are they smart enough to deal with the reality?. (is that why they have been kept in the dark, because they tend to stampede like sheep) What happens when they all find out that they have been lied to? All I will say is that so far the first 10% decline (there or therabouts) has come off the market whilst most have been kept in the dark thinking prices were still going up. What happens when all the baby-boom buy-to-debtors who need their equity from the investment home to pay off the family home find out about this lack of transparency. And has it been those in the know who have been secretly cashing out while claiming a rosie picture on property.. I do find it rather distasteful.

Your kamikaze dive could be an interesting proposition, it does seem that 5% off Melbourne in 3 months would suggest that that is what is happening there, so maybe not out of the question I guess. Kamikaze dive or a stampede of the sheep from the debt pen?

by Pragmatist | 6th Jun 18, 12:54pm 1528246458

Yes, i watched Martin North's livestream last night, hes mainly focused on the Australian scene, and he said he doesn't see armageddon just yet. So we may just have a mild recession instead of a crash. Or not.

by Auckland | 6th Jun 18, 2:55pm 1528253702

Losing up to $1,500 per week over the last 12 months has got to hurt. Thats like going down to the ATM and withdrawing over a $1,000 cash and then throwing it in the rubbish bin each Friday at the end of the week for the last 52 weeks. Now that is what I call a bad investment ! Wait until the media cant hide these numbers anymore and then who knows how fast the momentum will increase with panic sales crashing the sale prices. Maybe John Wheeler is going to be correct with his predictions that 2018 is the year of the crash!

by Nic Johnson | 6th Jun 18, 3:28pm 1528255724

This Barfoot & Thompson report that the median sales price in Auckland has fallen a mere 8.9% since March 2017 peak, would suggest to me that Westpac's flat market expectation of zero growth made yesterday may be akin to telling fantastical fairytales. Whatever you do don't let the FHB's find out, without them who knows what could happen?

Now Aunty Westpac, one of our generous Australian relatives (loves to hand out a big debt here and there) wants to know if anyone here would like a nice bedtime fairytale about the property market? Cheesy? THE MAN 2? TTP? ECOBIRD? DOUBLE GZ? its a wonderful yarn called the NEVERENDINGSTORY.

by printer8 | 6th Jun 18, 10:59am 1528239598

I would definitely read higher level of activity as not being the market taking off; rather, a keenness (you can read "desperation" but not quite yet) of vendors wanting to exit the market as soon as possible.
The fall in prices - but increased activity - supports this. Similar to retailers reducing prices in a sale but getting greater turnover.

by Nzdan | 6th Jun 18, 11:10am 1528240219

Beginning of the stampede. Vendors who are selling at the moment are likely still making a killing versus their original purchase price a few years back, but it's a fast race to the bottom.

by Tui12 | 6th Jun 18, 11:08am 1528240081

Shamubeel Eaqub paid $1.6M for his place this time last year. Homes has it at $1.45M now.

by Double-GZ | 6th Jun 18, 11:42am 1528242169

LOL fool of a Took. He had it coming!

by tgcam4 | 6th Jun 18, 1:07pm 1528247271

Was a sure sign to sell when he bought lol!

by Noncents | 6th Jun 18, 3:01pm 1528254111

exactly - If only he wrote more about shares and other investments.

by Nzdan | 6th Jun 18, 11:12am 1528240355

Sounds like he should have taken his own advice, LOL.

by Averageman | 7th Jun 18, 9:18am 1528319894

Indeed. He brought for security of his young family after the rental was sold for investor gains. End of the day there is always buying for this sort of reason including divorce, retirement etc. One note that he clearly states his ability to now invest in anything productive that might employ other kiwis, generate exports etc and help NZ is now.... nil.

https://www.stuff.co.nz/business/opinion-analysis/94966044/Shamubeel-Ea…

by Groen_mamba | 6th Jun 18, 11:29am 1528241370

Ave price -5% from peak; Median price -8% from peak. When do we start saying its a decline as opposed to a plateau? Maybe the property spruikers can let us DGMers know, as we don't want to be negative prematurely.

by Pragmatist | 6th Jun 18, 11:54am 1528242870

They'll admit its a decline after they unload a few of their over-leveraged properties, then tell us how smart they were to bail before the crash, even though a few weeks/months ago they were telling us property never loses.

Except the truely religious, who will keep denying reality as the mortgagee sale rate doubles, triples and quadruples over the next year. (if a crash eventuates)

by alittle | 6th Jun 18, 12:56pm 1528246564

One does not need data to know that market is trading in 2015 to 2016 level.

Any house purchased during or from 2015 /2016 and planing to sell now are having a tough time on an average.

by mfd | 6th Jun 18, 1:00pm 1528246825

Call me old fashioned, but I do like to confirm things with data.

by Nic Johnson | 6th Jun 18, 3:08pm 1528254487

8.9% off the median price of a house in Auckland since march last year. That's pretty resolute data, but keep it under your hat, whatever you do don't tell the First home buyers!

by mfd | 6th Jun 18, 3:50pm 1528257031

I'd agree we're trading at late 2016 levels, we're not at 2015 levels yet. I don't disagree with your maths on the 8.9% reduction in median price, but I disagree with the significance. There's no need to open yourself up to being criticised for hyperbole by cherry picking months in noisy, seasonal data. The year-on-year data suggests a fall of a few % points using barfoots data, the price graphs look essentially flat over the past couple of years.

by Nic Johnson | 6th Jun 18, 4:02pm 1528257736

Hi mfd.. The numbers are provided in the article so why not make it transparent. From peak in March 2017 we have seen a fall in the median sales price to May 2018 of 8.9%. By next weekend it'll probably be over 10%. It's not hyperbole, it's a reality that has been buried by the vested interests - many of whom have offloaded already to the detriment of those who are being fed false media and have the most to lose.. Or do you disagree?

by mfd | 6th Jun 18, 4:04pm 1528257853

Like I said, I agree with your maths. But, take a look at the graph and see what an anomaly the 900k figure was. It is not representative and you are cherry picking from a noisy data series. I agree that prices are falling, especially taking inflation into account, but there is no need to gild the lily.

by Nic Johnson | 6th Jun 18, 4:20pm 1528258837

mfd. I think we shall have to respectfully disagree on this. Cherrypicking the data would infer that I selected the data to report myself, when in reality the data that I have used to highlight the 8.9% price drop was provided within the text of the article provided and selected by the author, from information provided by Barfoot and Thompson who are the biggest sellers of property in Auckland and I believe the country.
All I have done is give that data meaning in percentage terms.

by mfd | 6th Jun 18, 4:26pm 1528259211

Yes, and the article has cherry picked it too by taking the absolute maximum on a noisy dataset. Using single data points can only tell you so much when there is so much noise month to month. An 8.9% reduction is true for a given value of true, but scientifically I wouldn't hang my hat on it.

by Nic Johnson | 6th Jun 18, 5:38pm 1528263513

Stability?? It's the same data?? Is it being fairly reported to the young though?? What do you think mfd? Time that a little truth was told?

https://www.stuff.co.nz/business/104495383/stability-returning-to-auckl…

by Pragmatist | 6th Jun 18, 4:37pm 1528259862

Will be interesting to see where REINZ puts the HPI in the next update which can't be far away. The Auckland HPI has been flatish since mid 2016, while pretty much everywhere else (except canterbury) has been heading up sharply.

by stuart786786 | 6th Jun 18, 10:03pm 1528279401

Correct. National gave us a data of 3% foreign buyer lol

by Hardly | 6th Jun 18, 1:01pm 1528246893

Prices go down/sales go up isn’t a good dynamic for the property bulls especially since inventory is still rising despite the increase in sales. Market is down a couple of percent. Its not a plunge but it’s going to start infecting people’s expectations.

by kpnuts | 6th Jun 18, 1:11pm 1528247490

So put another way -

Average -50K below peak and 24K lower YOY
Median 80K below peak and 26K lower YOY
Sales up 14% on 2017 low

I think this is quite a nice gentle correction - that currently is not likely to hurt homeowners or serious investors - but maybe a few people who jumped in to buy rubbish properties at ridiculous prices 18 months ago - and if it was duplicated over the next 18 months would still be ok - but ...

It would not take much for this to change to a crash or a rout - maybe one major shock - such as inflation and interest rate rises start to hit - no doubt that with a weaker dollar and oil at $70+ and signs of significant public sector wage rises - that we will see inflation much faster than expected - only a matter of time after that for interest rates to go up - and anything more than 1.5% could lead to a huge number of defaults and then a serious race to the bottom that cant be controlled by the NZRB or Government

by theglc | 6th Jun 18, 1:46pm 1528249587

Sounds nice that sales volumes were up on last year .... however it is still the 2nd worst May since 2011

Given how great the sales are going in the leafy suburbs and how massively over CV they are, according to our RE agent friends (you know who you are) I suspect that for medians and averages to be dropping like this some areas will already be feeling a heavy impact.

And.....we are only 1 week into winter......

by Shock | 6th Jun 18, 3:54pm 1528257280

Where are our resident property perma-bulls? They've been strangely quiet today.

I'd like to hear what excuses they come up with to explain this.

by mfd | 6th Jun 18, 4:05pm 1528257954

It's even convinced me to try to stand up for them a little. I guess I have a soft spot for the underdog.

by swapacrate | 6th Jun 18, 10:22pm 1528280568

The underdog to me is our children, first home buyers and the average Joe who are saving their guts out and getting no where, while prices increase faster then people can save.

by Nic Johnson | 6th Jun 18, 4:28pm 1528259306

On their knees at HSBC!

by Wrong John | 6th Jun 18, 4:48pm 1528260484

My only comment/question is ... When was the last time you believed a real estate sales person?

by Alter Ego | 6th Jun 18, 5:04pm 1528261490

For 4% of a Lot, I would lie a lot. For 4% of a plot plus a Kiwi House, I would clip the ticket, then fly away....as fast as a normal Kiwi can run....back to China, back to wherever .Cayman Islands....back to my Laundry position...I have wanted my entire life.....one click...Gorn.

by Hardly | 6th Jun 18, 8:27pm 1528273634

Trademe listings for Auckland are holding at high 11000s. Plenty of choice for buyers.

by swapacrate | 6th Jun 18, 10:33pm 1528281228

So are prices dropping, I didn't think prices in NZ dropped, I thought we were different.

Wonder what will happen if people start panicking and selling, that couldn't happen in NZ. First it was fear of missing out, soon it could be fear of losing money. But NZ is different.

by Alter Ego | 7th Jun 18, 2:40pm 1528339243

Friend put his house on Market, 725K.....finally sold for 660K less agents fees.....completion next month.

They had bought one for 780K for their retirement on a Bridging loan...last year.....as market was so "buoyant'

.I shall say no more...

by MiniCat | 21st Jun 18, 11:23am 1529536988

I think Barfoot & Thompson companies mentally is to just SELL SELL SELL (regardless if under selling or not), all for the sake of presenting good turnover numbers in there financials and having a healthy Profit. I am surprised at the amount of people who hold onto every word from Barfoot & Thompson as the Bible? Barfoot & Thompson are company as any other company who's number one priority is there bottom line (profits). There are a lot of unhappy Barfoot & Thompson customers who house was sold 100K below the RV. Was it because of the market? Or was it due to pressure? Or fear? At the end of the day if the home owner does not need to sell then don't sell your property at some ridiculous price under juress.

by MiniCat | 21st Jun 18, 12:46pm 1529541988