Falling sales, rising prices for Super City

Barfoot & Thompson managing director Peter Thompson

Barfoot & Thompson’s latest data shows the agency sold 674 properties in December, as compared to 757 in November and 721 in December 2016.

But the agency’s managing director, Peter Thompson, says one of the significant market changes in 2017 was the number of homes sold.

They fell by more than a quarter on the numbers sold in each of the previous three years.

He says the sense of urgency to buy a property regardless of its asking price has disappeared and has been replaced by buyers taking a more considered approach.

“Normally when sale numbers fall by such a large percentage, prices retreat from their record high levels.

“But this has not occurred, and prices have continued to rise modestly. It underlines there is still buyer support at current prices.

“In part, this was aided by the recent release of new capital values by the Council as sellers and buyers have the same information as to the potential value of a property.”

Barfoot & Thompson’s data shows the average selling price of Auckland homes did rise in 2017 but it was the lowest price increase across a calendar year for five years.

In 2017 the average selling price increased by 4.5% to $926,632 and the median selling price by 2.7% to $843,583.

Meanwhile, December’s average sales price was $939,871 which was 2.6% higher than the average for the previous three months and the fourth highest on record.

December’s median price was $870,000 which was 3.6% higher than that for the previous three months and the second highest on record.

Thompson says that while prices have continued to rise, the Auckland market has been reined in from rapid price increases and has settled into a more stable trading environment.

“Undoubtedly, the measures progressively introduced by the Reserve Bank, a more prudent approach to mortgage lending by the trading banks and a growing apprehension among buyers as to the prices being paid all played their part in cooling the market.

“At the same time, a housing shortage when the population is growing creates demand.”

The agency saw just 571 new listings in December, which is low, but over 2017 the average number of listings each month was 1510, which was the third highest on record.

Westpac senior economist Satish Ranchhod says the data points to a firming in the Auckland housing market in late 2017.

But he expects that this will be temporary.

“Looking at the longer-term trends in the housing market, a softening in conditions over the past year remains apparent,” he says.

“Despite their recent firming, sales are still well down on levels seen over the past year. Price growth has flattened off. And the stock of available listing continues to climb.

“We expect that the housing market will continue to slow over the coming year in response to concerns about changes in government policy and pressure on borrowing rates.”