Many economists are starting to predict that the country’s heated housing market will cool in the months ahead, but Peter Thompson, managing director of Auckland’s largest real estate company, is holding fire on making calls about the future direction of house prices in the city.
“It’s too early to tell the extent of how the Government’s regulations, introduced in March, are impacting Auckland,” he tells OneRoof.
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“Our sales numbers in April are the best we’ve had in 19 years. We’re not seeing a drop-off, we're not seeing any buyer fatigue. There are a lot of people buying and selling, and new people coming to the market.”
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At recent Barfoot & Thompson auctions, sales have ranged from $515,000 for a two-bedroom unit at 1/73 Mangere Road, in Otahuhu, to $3.7 million for a classic four-bed family home at 13 Brillant Street, in St Heliers , and $4.72 million for a sprawling country estate with development potential at 432 Runciman Road, in Ramarama – more than $2 million above CV.
The average sales price of properties sold by Barfoot and Thompson in April was just over $1.11 million (0.6% higher than March) and the median price was $1.05 million (up 0.2% on March).
Higher value properties continued to be in high demand during April, with 113 of Barfoot and Thompson sales, or 10.2% of all properties, being sold for more than $2 million. At the end of March the company smashed its auction record, when a luxury house at 31 Maungakiekie Avenue, in Greenlane, sold under the hammer for $9.9 million.
“Sales numbers at 1,107 for April were down 40% on those for March but were the highest they have been in an April for 19 years," Thompson says.
A four-bedroom family house at 13 Brillant Street, in St Heliers, fetched $3.7 million at auction. Photo / Supplied
Thompson points out that the drop-off reflects the usual seasonal pattern, due to school holidays, Easter and Anzac breaks. “There is always a seasonal downturn in trading in April from March, and the trends seen this year are similar to those experienced every year for the past 10 years,” he says.
“New listings for the month were 1,675 and while numbers fell 21.7% on those for March, they were down 7.9% on the number we have averaged over the previous three months. It suggests there was no major influx of new listings from investors abandoning the market. At month end we had 3,335 properties on our books, our lowest number of properties at the end of April for five years.”
Thompson adds: “We’ve still got buyers. The ‘shortage’ of properties, that is a bit of a myth. An excess of properties will happen only if they get built, and developers are facing high costs of materials and getting builders. Developers need to make money, but we’re not seeing any fatigue from them either.
1/73 Mangere Road, in Otahuhu, Auckland, recently sold under the hammer for $515,000. Photo / Supplied
“It’s positive that many good projects are almost all sold before they’re even on the market.
“Overall, the market is continuing to trade strongly. There is still a high level of uncertainty as to future direction, and this sentiment is likely to remain until any announcements about housing in May’s budget are absorbed.”
