Auckland buyers, sellers in property stand-off

The Auckland average house price rose slightly to $531,042 during August.
Photo / Herald On Sunday
The Auckland average house price rose slightly to $531,042 during August. Photo / Herald On Sunday

Auckland's largest real estate agency group, Barfoot and Thompson, has reported generally flat sales and prices in August from July, saying buyers and sellers remain in a stand-off.

Barfoot and Thompson, which is the first agency chain to report sales figures for August, said it handled 758 sales in August at an average sale price of $531,042.

This volume was down from 778 sales at an average $530,191 in July.

Sales volumes were up 18.9 per cent from 637 in August a year ago at an average $510,978.

Barfoot and Thompson Managing Director Peter Thompson said the average selling price had not varied by more than $10,000 in the last 4 months.

"This is unusual in terms of price movements, and shows just how stable property values are at present," Thompson said.

"Normally the market is weighted to either buyers or sellers. It is not common for it to be balanced like this for such a long time. There are eager buyers, and in historical terms not that many homes are for sale, but this is not affecting the prices on which buyers and sellers are reaching agreement," he said.

"Buyers are not prepared to go beyond what they believe a property is worth, while sellers are not accepting what they consider unrealistic offers."

Goldman Sachs NZ economist Philip Borkin said new listings rose strongly "potentially suggesting improved vendor confidence in Auckland. If listings continue to improve, it is likely to be interest rates and net migration that return as the predominant cyclical drivers of activity."

"While there are structural issues in the NZ housing market that we believe are constraining a strong recovery despite low interest rates (household deleveraging, affordability, tax changes etc), we believe a lack of properties for sale has been a major headwind in the Auckland market," said Borkin.

"Is this increase in listings a sign of increased confidence by vendors around achievable prices or is it vendors looking to sell property ahead of speculated Reserve Bank rate increases? This is of course unclear at this stage."

Borkin said the near-term cyclical drivers of the housing market (both in Auckland and nation-wide) would be interest rates and net migration.

"The latter has certainly been weak over recent months (although Auckland could be benefiting from intra-regional population movements), while the former has been stable (with Reserve Bank rate increases now looking less likely in the imminent future)."


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