Sales by Auckland's largest real estate agency dropped 49 per cent from March to April when the Covid-19 lockdown took its toll but May's figures could be worse.
Barfoot & Thompson, estimated to sell more than 40 per cent of Auckland residential properties, today released April data showing its agents had sold 1096 properties in March but only 522 last month during the level 4 lockdown.
The agency's new listings plummeted 86 per cent from 1763 listings in March to just 239 listings in April.
Peter Thompson, managing director, said activity in the Auckland market had been "bruised" by the lockdown.
The Real Estate Institute said sales of properties for around $3.6b was usual during this time of the year.
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Real estate agents are deemed non-essential workers. During levels 3 and 4, people are banned from attending auctions, few places are selling, and open-homes are banned in level 4. Now, activity is somewhat relaxed and open-home viewing is allowed with new rules around that. Physical auctions are still banned.
Banking economists have cited widespread job layoffs, falling business confidence and many businesses in crisis, so they expect house prices to fall 6 per cent to 9 per cent until either the end of 2020 or through to March next year.
Thompson said today's data was released with a cautionary note that the real effect of the lockdown would not show up until May's trading statistics.
"Not surprisingly, it was the sales numbers for the month where the biggest decline was felt, and at 552 sales these were half those for March," he said.
The properties that did sell were at prices not far below those in March, which were at their highest levels for more than two years, and for higher prices than they were 12 months previously, he noted.
The average price at $962,136, was down 3.2 per cent on March, but still well in excess of the average prices for February and January, and 3.6 per cent higher than the average price in April last year.
The median price at $900,000 was down 2.7 per cent on that for March, but again well in excess of the median prices for February and January, and 8.4 per cent higher than in April last year.
Some of these sales were made in April under the lockdown regulations, but many were sales completed in April but agreed in March, Thompson said.
The combination of sales date and completion date does not give a complete picture of the state of the market at the start of May.
The tail of properties working their way through the sales system is now modest, and it will not be till May's trading results are available in early June that a true indication of where benchmark prices are post Covid-19.
What April's data does underline is that before Covid-19 the Auckland property market was experiencing a solid upturn in sales and prices, and that upturn has been stopped in its tracks with a drastic fall in sales and a modest reduction in prices.
In a normal month, the level of downturn in April prices might be passed over as no more than a monthly variation.
In the few days of trading possible in April under Level 3 there was a positive level of activity in new listings, viewings and sales.
In April, the agency listed 239 properties for sale, less than a quarter of the number the company would anticipate listing at this time of the year, he said.
"The low number is also a positive sign for market stability as it does not suggest there is a large number of people who are looking to exit the housing market quickly.
"Vendors appeared to be taking a cautious wait-and-see approach, which is the same trend that occurred in past economic downturns."
More lower-priced properties sold last month.
"A stand-out feature of April's sales was that 40 per cent were for properties in the under $500,000 price category while property that sold for $1m and above accounted for a quarter of sales. Normally, they account for a third of sales," Thompson said.
This change in sales mix will have had some influence in reducing the average and median sales values for the month.
"At month end we had 3849 properties on our books. This is a higher number than the average for the previous three months but down 17.8 per cent on the number at the end of April last year," Thompson said.
The level 4 lockdown significantly affected the rural and lifestyle markets with sales numbers for the month only a quarter of what would be expected for this time of the year.
Interest in Far North dairy farms remained steady while lifestyle blocks, particularly those to the north of the Auckland urban area such as Waimauku, Woodhill and the Ararimu Valley, retained the interest of buyers, the agency said.