Return to traditional market – B&T

Barfoot & Thompson managing director Peter Thompson

That’s according to the head of the city’s largest real estate agency, following the slowest July in seven years.

Barfoot & Thompson’s July data shows that Auckland sales were down by 12.6% to 747, as compared to 855 in June.

They were down by over 25% (26.8%) on July 2016 which saw 1034 sales.

Barfoot & Thompson managing director Peter Thompson said the sales numbers meant it was the quietest July since 2010.

New listings were also down. July saw 1173 new listings which was 25.2% down on June and 17.7% down on July last year.

It was the lowest number for the same month in the past seven years, Thompson said.

Alongside the fall in sales, both average and median prices dropped further in July.

The average price came in at $908,319 in July, which was 0.6% lower than June and 1.7% lower than the average over the last three months.

However, it was still up by 4.6% year-on-year.

In contrast, July’s median price was $810,000 which was down by 3.6% on June and by 3.6% year-on-year.

Thompson said it will take some time for both buyers and vendors to navigate the changing market.

“Opportunities for vendors to sell are still plentiful, however sellers need to be willing to set themselves realistic expectations and listen to what the market is telling them.

“Vendors are less likely to see quick sales and significantly above average price increases, in the short term at least.

“However, this is still a good time to buy and sell in Auckland, given what are relatively small market movements.”

In this type of market, people are motivated by the more fundamental reasons to move house such as a growing family, change of job or downsizing, he said.

“This could be seen as a return to house sales being influenced by those more traditional factors.”

For ASB economist Kim Mundy, the data suggested that sellers are becoming more cautious.

The prolonged period of slower sales activity, along with the impending election, appears to be impacting would-be sellers’ decisions, she said.

“We expect both sales and new listings to remain soft over the next few months, but this could see inventory levels stabilise (or tighten slightly) rather than keep creeping higher. 

“Once we are through the election, we expect the imbalance between housing construction and population growth will keep a floor under Auckland house prices.”