House sales and prices hardly reduced by lockdown

Barfoot & Thompson’s sales for August at 1,020 were down 17% on July, but were not far off the 1,055 properties sold in August last year.

However, they were significantly down on the level of trading experienced in the previous three months.

The real estate company’s managing director Peter Thompson says if the same period last year is excluded, when the market was still recovering from a two-month lockdown, sales were more than 20% higher than normally achieved in August.

Sales and prices stood up extremely well during the first two weeks of the lockdown.

“A major reason for this is the systems and procedures the industry and other professions such as banking and legal have put in place to enable trading to carry on during lockdowns,” says Thompson.

“This enabled vendors and buyers to progress negotiations and contracts around properties that had been viewed prior to the lockdown starting.”

By the end of August the sales pipeline was shrinking.

Based on weekly sales data, sales numbers are two thirds of what they might otherwise have been had the lockdown not occurred.

Prices paid for property in August remained solid, with the median price increasing by 2.6% to $1,130,000, and the average price easing by 0.2% to $1,181,596.

These figures put the year-on-year median price increase at 23.9% and the average price increase at 18.7%.

New listings for the month at 1,258 ensured buyers had a modest level of choice, and at month end there were 2,601 properties on Barfoot & Thompson’s books.

This is 28 fewer than at the start of the month and the agency’s lowest number in more than four years.

Two-thirds of the homes sold during August were for more than $1 million, and 12% of all sales were properties that sold for $2 million or more.

“Given that the Covid lockdown is continuing into September for Auckland, potentially resulting in fewer new listings coming to market, sales numbers may well be down this month.

“This is likely to see prices holding or increasing, rather than falling,” says Thompson.

Three trends emerged during August in both the urban and rural markets:

1. the number of virtual appraisals and viewings taking place through the use of new technology
2. the number of appointments being made for viewings when Auckland moves to a level which allows them to take place
3. buyers looking to get ahead of the market by buying “sight unseen” but adding a clause to the sales agreement reserving the right to inspect and approve within three or four days of lockdown being lifted.

“These developments are assisting the market to move forward while under lockdown,” says Thompson.

Rural and lifestyle: Auckland and Far North

Sales in the rural and lifestyle markets throughout the Northland and Auckland regions have been largely unaffected, with sales in dollar terms being their highest in 18 months.

In the Far North interest remained high in beef and dairy listings, while to the north and south of Auckland, buyers were in the market for kiwifruit and avocado farms and potential greenfield developments.