Low sales dragging prices down

Barfoot & Thompson managing director Peter Thompson

Barfoot & Thompson’s latest data shows that Auckland’s average sale price was $913,606 in June, as compared to $942,717 in May.

That price reflects a 3.1% fall on the average price for the previous three months. It is also just 0.6% higher than the average sale price was 12 months ago.

At the same time, June’s median price was $840,000, as compared to $846,000 in May.

This was down by 2.9% on the median price for the previous three months and the same as it was for the same month last year.

Barfoot & Thompson managing director Peter Thompson said that while prices invariably fall as the market heads into winter, June’s results confirm that prices are definitely falling.

“Monthly sales numbers have been below the previous year’s numbers for nine consecutive months, and that is finally having an effect on prices.

“What is positive for the market is that prices are edging down rather than falling rapidly, and at current prices still represent a good outcome for vendors.”

The agency saw 855 sales in June, as compared to 886 in May, which was a 3.5% decrease.

Further, sales numbers were down by 26.8% on June 2016 when there were 1,168 sales.

Thompson said that sales for the month were their lowest in a June for seven years – and yet total listings on the market have not risen.

Total listings have not risen as sales numbers have fallen because some vendors have taken their property off the market, he said.

“Taking property off the market when prices are not rising is a common trait in Auckland and will contribute to prices remaining stable through to September’s election.”

However, there was a good balance of sales across all price ranges in June.

Sales numbers of properties under $750,000 made up 41% of all sales, while 34% of sales were properties over $1 million.

ASB economist Kim Mundy said the data shows sales activity remains well-below year-ago levels.

Eight months on and the tighter LVR lending limits are still weighing on activity – and ASB expects Auckland house price growth to remain subdued over 2017, she said.

“The recent lift in housing inventory, 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.”

Barfoot & Thompson’s data comes on the same day as QV’s latest data which shows that Auckland sales volumes in June were down by 30% on a year ago.

Read more:

Auckland sales down by 30% - QV