Barfoot heralds ‘return of positivity’ in the Auckland housing market

Auckland’s largest real estate agency is claiming a return of positivity to the city’s property market, despite median sale prices in August being lower than those recorded by the Real Estate Institute the month before.

Barfoot & Thompson managing director Peter Thompson said the agency had sold 879 properties in August – the highest number for any of the last 17 months.

“Not only did the number of sales during the month increase significantly, but the median sales price at $982,500 was also up 3.4% on that for July,” Thompson said.

That median was $7500 below the median Auckland sale price recorded by the institute (REINZ) in July, which sat at $990,000.

Thompson said this difference was likely to be due to more lower-price homes selling during August.

Thompson said compared to where the market had come from, August’s results were “a modest step forward”.

“The level of buyer motivation was the best it has been for more than two years,” he said.

Auction clearance rates also showed an improvement, although more than half of properties were still failing to sell under the hammer.

“August’s under-the-hammer clearance rate was 43%, more than double what it was a year ago,” Thompson said.

Thompson said once the election was over, he anticipated sales to increase, and a steady market through to year-end.

The outlook was different depending on whether the country came away with a Labour-led v National-led government in October’s election.

If Labour were to win, Thompson predicted prices would remain unchanged, but would fall up to an additional 1% to 2% over the year.

If National were to win, Thompson predicted prices would rise 5% over the same period.

“National would have a bigger support for investors,” he said.

“But we won’t get that big inflation like we did over 2021.”

House prices currently remain about 25% (or $179,000) above where they sat pre-Covid, according to CoreLogic.

According to Barfoot figures, 6.4% of sales in August sold for over $2 million, putting them in the price bracket that would be open to foreign buyers under National’s proposed policies.

Thompson said this part of the market had been quiet for the last 18 months, with few properties in the price-range listed, and those that were listed being snapped up quickly.

He said National’s proposed lifting of the foreign home buyers ban would bring more competition to high-end properties, pushing their prices up.

He did not believe National’s foreign buyer plan would result in notable price increases among lower and mid-range properties.

The number of homes for sale was rising, according to Thompson, with 1577 new listings during August – a 30% rise on July.

He put this down to more sellers feeling positive about the market, as well as sellers accepting prices were lower, and deciding to accept the new reality, list, and get on with their lives.

“At month end we had 4155 properties on our books, 1.9% more than at the end of July,” Thompson said.

Thompson characterised the market conditions as neither a buyers’ nor a sellers’ market, but rather a neutral market where supply and demand was well-balanced.

He said vendors willing to accept reality were selling at a reasonable price, and those who still expected pandemic-era prices were not finding buyers.

There were also more apartments being listed. Apartments are traditionally attractive to investors, but Thompson said there was no mass investor sell-off happening.

He said the increase was due to large apartment projects being completed, and the apartments within being listed.

“Some of them would have been bought as an investment, and then they are on-selling, and they’ll be caught by the bright-line test of course.”

“The growing number of apartments entering the market, combined with the market downturn experienced since November 2021, has seen the re-emergence of properties selling for under $500,000,” Thompson said.

In August roughly 19% of our sales were of properties selling for under $500,000.