Auckland's biggest real estate agency has reported a big drop in house prices in the city and a near-collapse in property sales in April.
Barfoot & Thompson said the company's sale median price last month of $1.141 million was 3.3% down on the March median while the number of property sales had fallen 47.9% to 615 over the same period.
Barfoot and Thompson managing director Peter Thompson said that spikes in inflation and interest rates were having a negative impact on the housing market.
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“The greatest impact the changed economic conditions had on the property market in the month was on the number of property sales," he said, adding that April holidays had cut into selling time.
He said while property values in Auckland were still up on a year ago, buyers were well aware of the shift in prices and were negotiating harder.
“Buyers are now showing a greater reluctance to meet vendor expectations," he said.
“Twelve months ago, they’d pay what was asked, but good buyers don’t need to rush now. They are taking their time.”
He added: “Vendors who have an open mind as to the value of their property are the ones who are more likely to achieve a sale."
New listings for the agency in April were down a third on those for March, but Thompson said the number was in line with a typical April. “It brought our month-end stock number to 4845, the highest it has been for more than three years," he said.
Barfoot & Thompson managing director Peter Thompson says buyers are negotiating harder. Photo / Supplied
“With buyer choice remaining excellent and economic conditions unlikely to alter in the short term, to be successful in coming months, vendors will need to focus carefully on their price expectations."
Thompson said that after two and a half years of a “crazy” market, people were no longer sure what “normal” was.
“We’re in the market day by day, but most people are buying and selling only every seven to ten years," he said.
People start to panic when they hear predictions of house price drops of 15%, he said, but the agency's figures don't indicate anything of the sort.
“They’re all theory; our figures are the facts.”
Thompson added that sales of properties at the top end of the market remained strong, with 85 properties - 14% of all sales - being sold for more than $2m.
