Sellers lower price expectations

Barfoot & Thompson managing director Peter Thompson

Barfoot & Thompson’s latest data shows that sales numbers were up in February but prices eased back on those of recent months.

The agency saw 665 sales in February which was an increase of 12.1% on the 593 sales in January and an increase of 19.6% on the 556 seen in February 2017.

At the same time, the average sales price was $919,454 in February – which was down by 1.6% on $934,793 in January and by 2.7% from $944,574 in February 2017.

February’s median price of $820,000 was down (by 1.2%) on January’s $830,000, but it was the same as it was in February 2017.

Barfoot & Thompson managing director Peter Thompson says there seems to be a growing acceptance that where prices are now is likely to be the benchmark for the rest of the summer/autumn sales season.

“Sales numbers were up, there was strong growth in new listings (up 45.6% on January) while prices, although softening a little on the previous three months, were stable.

“Combined with the relatively high number of properties on the market, the current stable conditions make it a good time to be looking to buy.”

One feature of February’s trading was the relatively high number of sales of properties valued at under $500,000, Thompson adds.

“At 127 sales they accounted for 19.1% of all sales, a significant increase on the 8% of sales in January.

“Many of the under $500,000 sales took place in central south Auckland, and on the northern, western and southern fringes of the metropolitan area.”

For ASB economists, the data suggests a change in seller expectations.

They say that prices have held up for some time despite the falls in sales activity which indicates sellers have been holding out for higher prices and even withdrawing properties if expectations were not met.

“Today’s data might suggest a slight change in this trend. That is, the higher sales turnover combined with lower average price could be a sign that sellers are starting to lower their price expectations.

“Prices are often slow to adjust in a changing market so it would not be a surprise to only see this taking place now.”

But they say that one month does not make a trend and they will be closely monitoring future data.

Further, they expect the housing market to remain muted over coming months due to uncertainty around the implications of the new government’s housing policies.