The latest sales figures from Auckland's largest real estate agency suggest the city's housing market is on a steady course heading into spring.
Barfoot & Thompson sold 795 residential properties in August, down slightly from the 830 it sold in July but up slightly from the 777 properties it sold in August last year.
There was a jump in new listings in August but overall stock levels and prices were little changed from the same period of last year.
Barfoot signed up 1331 new listings in August, up 25.9% compared to July but up just 5.6% compared to August last year.
That took the total number of residential properties the agency had available for sale at the end of August to 4022.
That was down 2.3% compared to July but almost unchanged from the 3993 homes Barfoots had available for sale at the end of August last year.
And although the agency's total inventory has fallen consecutively for the last five months, it was still at its highest level for the month of August since 2011, suggesting buyers should not be short of choice.
Barfoot's average and median selling prices both rose slightly in August compared to July, but remained with the narrow price bands that have been prevalent for the last two years.
The average selling price increased from $912,266 in July to $928,266 in August but remained below where it was in June.
The median price increased from $810,000 in July to $840,000 in August which means it is still below where it was two years ago.
Essentially Barfoot's monthly price movement, both up and down, have been relatively modest and have stayed within a fairly narrow range, suggesting the market remains in a period of relative price stability as it heads into spring.
"The increases we are seeing in the market are unlikely to be the forerunner of another seller's market," Barfoot & Thompson Managing Director Peter Thompson said.
"Rather they are an indication that the bottom of the price cycle is likely to have been reached, confidence in prices is returning and that as spring advances buying pressure will increase."
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Coming to Auckland and Queenstown?
“(High end) property values in the nation's glitziest postcodes are falling twice as fast as low-end housing. (Australia’s) richest real estate has been sliding at an annual rate of about 8 per cent, compared to 4 per cent for properties in the bottom, or fourth quartile…That means property prices in Point Piper, home of the former prime minister Malcolm Turnbull where the median price is $15 million, could be falling by about $1.2 million a year, or $23,000 a week. Rising interest rates, political uncertainty, stagnant incomes and increasing investor nervousness about proposed changes to negative gearing are contributing to a sharp downturn in lower priced property, too…Melbourne's property prices have fallen by 7.6 per cent in the past three months, the nation's highest. Sydney's fell by 7.2 per cent…Investor demand, weakened by tighter credit supply and weaker price and rental outlooks, is driving the downturn...”
https://www.afr.com/real-estate/home-values-of-nations-richest-falling-…
Ex Expat..
Nah, it doesn't look like buyers are in any particular rush (apart from a few foreigners perhaps) Trademe listings for New Zealand just went through 30,700 to 30,706. Where were we yesterday?
Now I hope you agree that that's quite a rapid ascent in availability, particularly now we know (see my comments below) that 4 in 10 Barfoot listings aren't selling this year (but are being taken off the market instead) plus you would presume a similar percentage of withdrawals from the other agents around the Country. Now I'd guess that some of the 1000's of houses that have already tried to sell and given up this year will at some point want to try again - what happens to stock levels then?
Weren't you the one that shouted eureka with Linz data reckoning you knew exactly how leveraged house owners were, only to find out it was mostly useless info? Think about what you are assuming and put common sense measures on it. I personally find it hard to believe that 40% of all Barfoot customers prepare their property for sale, pay for marketing, do open homes etc. then withdraw the property and never sell. I'm not going to talk to my local agent as I've already told him we're not sellers until 2040, then send mixed messages by annoying him for inside info on every question posed here. Maybe DC can help you confirm/deny?
Just check out the disparity between monthly listings and sales and then look at the reality that barfoot's overall stock levels of available homes has remained fairly static all year. Now I'm pretty sure that those listings didn't just vanish into thin air, so the multitude of houses that didn't sell, where did they go? Answer, absolutely nowhere because in the case of 40% of the listings this year the market is not prepared to meet the wild aspirations of the sellers. David hasn't yet provided anything to suggest otherwise and the numbers are the numbers whether it suits your narrative or not!
Based on the last 5-10 years of cheap cash global income leverage etc you would expect a retreat at the higher end. The net difference in what makes a property worth $15m or $13m is the strength of economic factors more than anything else. They remain amazing and very expensive property.
Hi bw.
Just come across this link that J.C posted this last week about tightening credit conditions in Australia and increasing numbers of loan applications either being outright refused or having a significant reduction in offer level. Credit availability remains the pillar of the Ponzi, so it'll be interesting to see if these restrictions are transferred across the ditch.
https://www.macrobusiness.com.au/2018/08/mortgage-rejections-skyrocket-…
.. tightening credit conditions in Australia ..
Nic J, Thats in Australia. We saw in another post in this site that credit slows ( only business ? not sure ) and deposit grows here... Is NZ banks very strong in their leverage ratios ?
or the post was only about business lending ? are they 2 completely different/independent taps ??
There was a blog article on the Squirrel website recently that described how NZ banks were applying much stricter expense checking to new loans than previously, and that it was materially reducing mortgage borrowing power.
Unfortunately I can't find that article now.....perhaps it's been taken down :)
Barfoot & Thompson Figures.
March 1689 new listings, 1064 sales
April 1358 new listings, 731 sales
May 1455 new listings, 1027 sales
June 1210 new listings, 903 sales
July 1057 new listings, 830 sales
August 1331 new listings, 795 sales.
In essence 1/3 of the 8100 listings have failed to sell since March with a sales to instructions ratio running at 66%, which was just 59% during August. Its just a metric but if you have an understanding about the real estate industry a ratio below 80% is not a sign of a strong market and signifies a need to address pricing.
Stock levels for barfoot have hovered in the early 4000's for most of the year so currently 1/3 of sellers are failing to sell.
Hi David
Every month they state how many new listings they take on and how many they sell. What happens to the rest? For whatever reason they fail!
Sales to instruction ratios is a KPI for anyone in real estate. You can assess the real estate agents that are over-valuing and in a sensible business stop them going out on appraisals. Love to know where you are getting your figures from as these come direct from their site. Happy to break it down year by year if you'd like me to and we can gage the real 'drop out' rate as you describe it.
Nic
Has it occurred to you that their inventory / 'number of houses on their books' could be increasing, accounting for some of the difference between new listings and sales?
For example, at the beginning of this year, B&T had an additional 19.3% properties on their books compared the same time a year earlier, and up 68% compared to 2016.
This month and early next month many sellers will rush to sell their property before the ban is implimented as no one knows what the consequence of the ban will be so not taking chance.
Besides percentage of sold sign should be more as many non residents should and will rush to buy before the ban.
Many real estate agent are aware of it and trying to get the maximum out of the stuation as is an opportunity for them.
No hiding foreign asset from now on?
"New Zealand banks are set to freeze thousands of accounts for people who have yet to respond to requests to confirm whether they are foreign taxpayers. Under the new legislation, financial institutions must find out whether their customers are tax residents of other countries and report the details of those who are to the Inland Revenue by June 30 each year, starting this year"
"It is worth mentioning that China, Australia and New Zealand are all on the list of information exchanged for the first time in September this year. Basic information about all non-residents who open an account , such as name, ID number, address, birthday, account number, account balance, and major transactions that occur each year, as well as bank deposit accounts, escrow accounts, insurance contracts, etc. Information will be shared by the tax bureaus of China ...."
(Via MacroBusiness)
If interest rates went up as little as 1% NZ would be f**ked.
Too many people with too much borrowing, it'd cause a recession.
And you know what would happen then don't you? The RBNZ woudl lower rates to save the day!
So all n all, interest rates can not and will not go up.
The larger a bank's portion of funding that is required from offshore, then this influences the bank's cost of funds. If a bank's cost of funds is rising, then they will raise their interest rates on their lending.
https://www.rbnz.govt.nz/financial-stability/overview-of-the-new-zealan…
https://www.interest.co.nz/news/86326/we-look-detail-where-banks-source…
Yvil, whoopdeedoo. Posting such links while reportedly digging your own bunger is a bit pointless. Anyway, the higher the altitude, the thinner the air.
https://www.stuff.co.nz/business/money/106829844/the-next-sharemarket-c…
http://prospect.org/article/next-crash
https://www.cnbc.com/2018/09/04/jpmorgan-says-next-crisis-will-feature-…
Note the second link from commentator CN quote "It is hard to believe perhaps, but more than 80% of bank funding is in accounts that mature in less than 12 months"
It's hard to imagine what caused you to become so misinformed considering it was published on this very website ;-)
Ha-ha-ha :) "munch-munch" anyway Expat, why you continually check the spot value of your property is beyond strange. Whether mine is worth seven, six or five figures matters to me not. It appears you seek out shallow ways to reassure yourself of riches. Please assure readers there's more to you than the same daily mutterings coming from someone recently disenfranchised.... :-/
I check it because it's regularly updated, easily accessible and good enough for bank use, evidently. I figure it's a good counterpoint to the smoke and mirrors put out there by the DGM who ironically say the same thing over and over again on a daily basis (does the irony ring a bell?). BTW: True on the disenfranchised. You may be able to find purpose in an early retirement, but I can't. I have part time consultancy in the offing and can afford to take jt up until 31/3/19 without WFF impacts :)
Ex Expat, I think by responding with your own cherry picking is solely for self gratification. Besides, in a short time events of unique complexities will unfold helping clear any problems with smoke and mirrors. Anyone who suggests the NZ market is crashing right at the moment is using smoke and mirrors - its not.
Adam B NZ,
He's just 'talking his book',which is what salespeople do-or put another way,he's whistling in the dark.
I don't know the Auckland property market,but i do know a little about the stockmarket and like you,I think markets are looking distinctly wobbly. Perhaps Amazon 'deserves' to be on a P/E of 207,but as an article in today's Sydney Morning Herald says,that's priced beyond perfection. I am not trying to call the top of the market-that's a mug's game,but I have been gradually taking money off the table for some time. I am battening down the hatches ahead of the storm I think is coming.
The median value of a house there (Auckland) is now $1,243,037 and a household would need to be earning $241,200 - more than triple the city's median income - to be able to comfortably cover the monthly repayments on a 30-year mortgage at 5.79 percent.
interesting atricle about affordability here..
https://www.yudu.co.nz/news/here-s-how-much-you-need-to-earn-to-buy-a-h…
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