Barfoot & Thompson gets early spring rush of new listings

Property

Barfoot & Thompson's August sales figures suggest the Auckland housing market is on a solid footing for the start of spring, managing director suggests bottom of price cycle has been reached

5th Sep 18, 10:42am by Greg Ninness

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."

Barfoot Auckland

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Source: Barfoot and Thompson

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66 Comments

by bw | 5th Sep 18, 10:43am 1536101029

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-…

by Retired-Poppy | 5th Sep 18, 11:05am 1536102328

It's possible that cheaper mortgage rates are providing some welcome "can kicking" support. Have we reached the cyclical bottom? Nah, I think Thompson's walking a rotted plank on that one. There's simply too much financial risk developing beyond our shores.

by Nic Johnson | 5th Sep 18, 11:02am 1536102147

and the foreign buyer rush to beat the ban only resulted in 700 or so sales. Spilt between 1600 agents means a few hungry Realtors out there.

by Ex Expat | 5th Sep 18, 11:03am 1536102229

It's possible that buyers just want a home and can afford to buy now. Settle down for late Spring and get on with their life.

by Nic Johnson | 5th Sep 18, 2:44pm 1536115462

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?

by Ex Expat | 5th Sep 18, 4:02pm 1536120154

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?

by Nic Johnson | 5th Sep 18, 4:45pm 1536122726

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!

by Nzdan | 5th Sep 18, 4:48pm 1536122891

Delisting and relisting to massage the time on market stats.

by Nic Johnson | 5th Sep 18, 5:39pm 1536125954

I'm sure that that is happening but wouldn't have thought that barfoot would report them as new listings again in their numbers. No business would double count their potential forward order book. That would be daft.

by Nzdan | 5th Sep 18, 5:50pm 1536126635

Could be unintentionally double counted if a relist comes with a new unique listing ID.

by Averageman | 5th Sep 18, 11:03am 1536102217

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.

by Nic Johnson | 5th Sep 18, 11:20am 1536103242

Barfoots recent August Sales Result History
2018 - 795 sales
2017 - 777 sales
2016 -1003 sales
2015 - 1314 sales

I'm not sure why Mr Thompson would appear so chipper, that's two stinking Augusts in a row!

by Nic Johnson | 5th Sep 18, 12:06pm 1536105993

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-…

by Greg-Hamilton | 5th Sep 18, 12:40pm 1536108041

.. 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 ??

by Zombie ponzi | 5th Sep 18, 12:47pm 1536108452

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 :)

by Greg-Hamilton | 5th Sep 18, 2:49pm 1536115796

..how NZ banks were applying much stricter expense checking to new loans than previously

Missed that article. So from when did they started stricter process, the article say ? after royal commission thingy in Aus ?

by Nzdan | 5th Sep 18, 4:41pm 1536122471

You’re not talking about the Responsible Lending Code are you?

by Zombie ponzi | 5th Sep 18, 8:24pm 1536135868

I got the impression from the article it was blow back from the Royal Commission in Australia.

by NorthernLights | 5th Sep 18, 2:48pm 1536115687

Australia still has beautiful beaches & great people
Pity it’s having problems keeping its Prime ministers

by RickStrauss | 5th Sep 18, 10:50am 1536101410

Mr Thompson seems chirpy, but it really looks difficult to call much of anything from this.

Apart from...it's the same as it has been for a while now.

by Ex Expat | 5th Sep 18, 10:55am 1536101731

Cue 100+ posts rehashing previous posts that have little relevance to the actual article.

EDIT: Except Rick's post above.

by HouseHunter | 5th Sep 18, 11:01am 1536102071

LOL

by RickStrauss | 5th Sep 18, 11:22am 1536103345

Nawww shucks

by Nic Johnson | 5th Sep 18, 11:04am 1536102258

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.

by David Chaston | 5th Sep 18, 12:17pm 1536106670

Don't agree on the "1/3 of sellers are failing to sell". We have a long-run calculation of B+T's drop-out rate. In 2018 it is averaging a bit less than 13%, so that is 1 in 8 that are failing to sell. Specifically in August it was 15.3% (1 in 6.5).

by Nic Johnson | 5th Sep 18, 12:34pm 1536107681

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

by BuyLowSellHigh | 5th Sep 18, 1:08pm 1536109701

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.

by Cowpat | 5th Sep 18, 12:44pm 1536108272

Available listings December 31 2017, 4160 . Properties listed January 1 thru August 31 11047. Properties sold 6608. Number of available listings August 31 4022.. Who wants to do the math. I have a 5 year old suggesting a higher drop out rate. ( she votes Nic )

by Nic Johnson | 5th Sep 18, 1:42pm 1536111735

Thanks Cowpat (edit as I forgot my manners)

So essentially closer to a 60% success rate in 2018 from listings to sales or in lay-mans terms 4 in 10 are failing to sell this year. Anyone want me to go through 2015-2017?

by BuyLowSellHigh | 5th Sep 18, 2:01pm 1536112887

"4 in 10 are failing to sell this year"? "60% success rate in 2018"?

You are so confused.

by Nic Johnson | 5th Sep 18, 2:12pm 1536113528

And someone thought it prudent to give you a mortgage!

by BuyLowSellHigh | 5th Sep 18, 2:15pm 1536113737

*multiple mortgages

by Nic Johnson | 5th Sep 18, 2:22pm 1536114127

and a bath toy? NZ is rubber ducked then!

by BuyLowSellHigh | 5th Sep 18, 4:20pm 1536121246

So sad. Your case of severe property envy has left your mind a shambles.

by NorthernLights | 5th Sep 18, 2:54pm 1536116075

I agree with David it’s not a third
Things are holding up in Auckland
It will be the usual stagnation in sales with over supply but little price reductions
The Auckland tradition is to sit not sell at too low a price
I wish it would drop significantly

by Nic Johnson | 5th Sep 18, 3:28pm 1536118103

No it's probably not a third that was just the last 6 months. When you look at the numbers from January it actually looks like it may be more like 40% of Barfoots' listings that aren't selling.

by fibar | 5th Sep 18, 11:01am 1536102084

It will be interesting to see the listing numbers after the Buyers Ban has been implemented in October.
My guess for many, it is a last minute rush for the door.

by Pragmatist | 5th Sep 18, 11:25am 1536103539

Article summary: Chief Spruiker at large real estate agency reveals that sales haven't really increased from where they were last year, but calls the bottom anyway, then prays that prices and sales will pick up in future.

*yawn*

by J.C. | 5th Sep 18, 3:07pm 1536116850

And because he's sold property all his life and "seen it all before", we're supposed to give him our undivided attention.

by saving_for_aus… | 5th Sep 18, 11:37am 1536104239

It's a good thing most New Zealand citizens have access to Australia, and a great deal of us have access to second passports. Otherwise we'd all have to buy overpriced sheds in Auckland and other 'thriving metropolises' like Christchurch.

by printer8 | 5th Sep 18, 11:53am 1536105186

"Auckland housing market is on a solid footing for the start of spring" = agent speak (i.e. meaning glossing over something not desirable).

by Zombie ponzi | 5th Sep 18, 12:08pm 1536106093

"the bottom of the price cycle is likely to have been reached"

Huh? I don't recall Barfoot ever suggesting that prices had gone down, so how could we have reached the bottom?

by taimaiakka0 | 5th Sep 18, 12:44pm 1536108246

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.

by taimaiakka0 | 5th Sep 18, 3:06pm 1536116808

by bw | 5th Sep 18, 1:59pm 1536112775

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)

by RickStrauss | 5th Sep 18, 2:05pm 1536113121

That is very interesting, China having visibility of funds flowing out of China and into NZ, given all the talk of China having to shore up capital outflows to prevent the hollowing out of its economy.

by Davo36 | 5th Sep 18, 2:38pm 1536115114

But only 3% of buyers are foreign buyers... rofl.

by Averageman | 6th Sep 18, 5:29am 1536168587

Lets not act suprised.

One only has to drive around any DGZ primary feeder school to see the parents from this part of the world at 3pm (me for work). Beyond transformational in the last 10 years.

by Chairman Moa | 5th Sep 18, 1:57pm 1536112663

Over the ditch, the big banks (some smaller ones) are putting up floating interest rates due to the raising cost of loan funding. I'm assuming same scenario will be played in NZ shortly.. lock it in people!

by Davo36 | 5th Sep 18, 2:40pm 1536115217

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.

by Nic Johnson | 5th Sep 18, 2:55pm 1536116111

That's what they were saying in Australia too and despite the RBA maintaining its 'steady as she goes position' on the base rate yesterday , the lending banks are raising mortgage rates anyway.

by Chairman Moa | 5th Sep 18, 2:57pm 1536116230

RBNZ official Interest rate is becoming less relevant to the typical mortgage rates. It's used to but not anymore. 90 days swap rates is now more relevant!

by CN | 5th Sep 18, 3:38pm 1536118734

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…

by Foyle | 5th Sep 18, 9:07pm 1536138466

term deposit rates are dropping as banks are having more and more depositors come to their doors. So rising mortgage rates unlikely in short term

by Yvil | 5th Sep 18, 3:21pm 1536117674

https://www.corelogic.co.nz/news/top-suburbs-value-growth-2007?utm_sour…

by Retired-Poppy | 5th Sep 18, 4:22pm 1536121363

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 ;-)

by Ex Expat | 5th Sep 18, 4:23pm 1536121419

Nice trolling there Yvil, it looks like you got a bite :)

BTW: Just checked the Core Logic automated revalue. As of 2 September, it's up $10k on the figure from the 19th of August. They must update it fortnightly. It's now at 101.3% of 2017 CV.

by Retired-Poppy | 5th Sep 18, 4:41pm 1536122494

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.... :-/

by Ex Expat | 5th Sep 18, 4:45pm 1536122726

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 :)

by Retired-Poppy | 5th Sep 18, 5:23pm 1536125037

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.

by Ex Expat | 5th Sep 18, 5:20pm 1536124802

By events of unique complexities, are you referring to Government Ministers speaking in tongues? Minister Curran did that today in spectacular fashion. It must be heartening to support the COL.

by Jaf | 5th Sep 18, 7:13pm 1536131630

Barfoot & Thompson..............." an indication that the bottom of the price cycle is likely to have been reached"

Gazing at a cracked crystal ball !!

I wish I were as confident in my predictions.
One big yawn.I would say "My FOOT"

by alittle | 6th Sep 18, 7:05am 1536174327

Trying to boost the morale of his sell force

by Adam B NZ | 6th Sep 18, 3:08am 1536160092

"managing director suggests bottom of price cycle has been reached" - Is this guy serious? Nevermind the next Global financial crisis which is currently underway!

by linklater01 | 6th Sep 18, 4:58pm 1536209886

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.

by fat pat | 6th Sep 18, 7:59am 1536177567

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…