Auckland market different now – B&T

Barfoot & Thompson managing director Peter Thompson

Barfoot & Thompson’s sales in March (1110) were nearly double that of February (556), although they were down from March last year (1341).

At the same time, the agency saw both the median and average prices reach new monthly records in March.

The average sales price was up 2.5% to $968,570, as compared to $944,574 in February. This was a quarterly rise of 4.8% and a year-on-year rise of 11.7%.

But the median sales price jumped up by 9.8% to $900,000 as compared to $820,000 in February. This equated to a quarterly rise of 7.7% and a year-on-year rise of 12.8%.

While these price rises seem pretty hefty particularly after the quiet start to the year, Barfoot & Thompson director Peter Thompson warned that Auckland’s market is different now.

An upturn in March, which is traditionally the high point for prices in the first half of the year, was always on the cards, he said.

In Thompson’s view, the rise in activity was due to the higher level of choice available.

“While the number of properties for sale at month end at 4413 was down 2.9% on the end of February, during the month an additional 1983 new properties were listed.

“So choice during the month was greater than it has been for the past four years.”

But the rate at which house prices were increasing slowed markedly in the last part of 2016 – and this has continued into the first quarter of this year, he said.

“The back story to these numbers is that clearance under the hammer at auction was down to around 40%, and more sales were agreed in after auction negotiations following vendors and buyers making modest compromises on their positions.”

This means sellers will have to accept the Auckland market is changing in order to achieve a successful outcome, Thompson added.

The Barfoot & Thompson data did little to change some commentators’ assessment of the Auckland market.

ASB economist Kim Mundy said while it showed sales lifted in March, on an annual basis sales remain 17.2% below March 2016 levels.

But they expect Auckland house price growth to remain subdued over 2017, she said.

“The recent lift in inventory levels, last year’s LVR changes and marginally higher longer-term mortgage rates are likely to contribute to softer house price growth.

“However, sluggish growth in housing construction relative to population growth, should keep a floor under prices.”