Buyers Return to Auckland House Market

By | April 3, 2009

3 April 2009

Source: AAP

Barfoot & Thompson reported Auckland house sales at a 20-month high in March, with the agency saying home buyers returned to the market with a “vengeance”.

The agency sold a total of 924 homes last month, up 65.3 per cent on those for February and up 46.2 per cent on those for March 2008.

At the same time, the average price achieved for sales in March was $NZ491,780 ($A397,751), down 4.1 per cent on February’s average price and down 5.8 per cent on the average in March 2008.

“We sold close to 300 homes more in March than in any month in the whole of 2008,” Barfoot & Thompson managing director Peter Thompson said on Friday.

The size of the recovery was greater than any expectation.

“Buyers may be sensing that market prices are close to the bottom of the cycle and have made the decision to act,” Mr Thompson said.

“At the same time sellers are accepting that a price that is on average only 6 per cent below values being achieved 12 months ago is realistic in the current market, and are ready to accept.

“It means that the market is active, and the housing market is edging further back to normality.”

Goldman Sachs JBWere analyst Shamubeel Eaqub said the surprise and huge bounce in sales was consistent with mortgage approvals.

There were uncertainties around the durability of the surge, with job losses yet to fully flow through the economy, he said.

“The level of sales, while still historically low, shows the first encouraging signs of traction from lower interest rates.”

On a seasonally adjusted basis, the level of sales was the highest since November 2007.

Barfoot & Thompson’s Mr Thompson said another indicator of returning confidence was the level of interest shown at auctions.

Attendance numbers were the best in a year last month, and some 65 to 70 per cent of all the homes put to the market sold.

Factors affecting sales activity last month were the traditional March spike, further falls in the Reserve Bank’s official cash rate, bank mortgage rates reaching new lows and knowledge that tax cuts were about to kick in.

At the end of March the agency had 6416 listings, the lowest number in 13 months.

While new listings in March were a healthy 1398, the number of homes sold during the month meant the number of homes listed was the lowest for 14 months.

“Currently, there is an excellent window of opportunity for those keen to sell,” Mr Thompson said.