Big drop in Auckland prices

The latest Barfoot & Thompson data shows that both the average price and the median price declined in January.

Barfoot & Thompson managing director Peter Thompson said prices were down on the all-time highs achieved in the last months of 2015.

Auckland’s average price was $811,700 in January. This was down 6.6% on December’s average price of $869,492.

The median price was $760,000 in January. This was down 5% on December’s median price of $800,000.

But Thompson said that, on a year-on-year basis, January’s average price was 7.2% higher than at the same time last year and the median price was 8.6% higher.

“Rather than January’s prices reflecting a fall, the decline can be traced to a change in sales patterns.

“During January we sold a higher percentage of homes in the outer southern and northern suburbs compared to those in the central and eastern areas than is normally the case.”

Further, there were less $1 million plus houses and more under $500,000 houses sold in January than in December.

In Thompson’s view, it is too early to tell whether the January data indicates a trend – especially as, traditionally, market activity in the first month of the year is a mix of ups and downs.

“It will not be until early March, when February’s sales data is available, that a true trend for 2016 emerges.”

Meanwhile, sales were 4% higher in January 2016 than they were in January 2015 and they were also up 12.2% on December.

These sales numbers were at the top end of what Barfoot & Thompson normally sells in a January, while new listings were light, Thompson said.

“The clear signal to emerge is that buyer choice is the lowest it has been at the start of a year for 20 years.”

The fact that there was a lift in sales while new and available listings both fell is important for financial markets, according to Westpac chief economist Dominick Stephens.

The Auckland housing market slowed sharply over the final three months of 2015, which was an important tick in favour of OCR reductions, he said.

“However, today's data calls into question the longevity of the Auckland housing market slowdown.”

While the latest price data from both Barfoot & Thompson and, yesterday, realestate.co.nz remained weak, Stephens said they paid less attention to the price data from these sources.

“Barfoot and Thompson data has been volatile in the past, so today's strong data should not be considered conclusive - it is more of a straw in the wind.

“We await REINZ's more comprehensive report for further information on the state of the Auckland housing market.”