Housing market show signs of rebound

The Auckland housing market is showing signs of rallying. Photo / Paul Estcourt

The Auckland housing market is showing signs of rallying - agents say sales last month were at 12-month highs.

Barfoot & Thompson - which handles about one in three of the houses sold in Auckland - last month sold 924 homes in the city, 46.2 per cent up on the same period last year.

Managing director Peter Thompson believed the surge in sales was the result of a traditional March sales rise, falls in the official cash rate, and cuts in bank mortgage rates.

Tax cuts are also believed to have played their part.

He said the company sold nearly 300 more homes in Auckland last month than in any month last year, and 65.3 per cent more than in February.

Other agents are also reporting a sales revival.

But some economists are warning sellers and buyers not to get too excited yet.

Harcourts chief executive Bryan Thomson said the company was still calculating the figures, but estimated a 40 per cent increase in sales on March last year.

Sales were the highest they had been since late 2007, he said.

"We're judging the sales numbers against historically low levels. So while they're better than they have been, it's not time for people to jump up and down and say we're on the cusp of another wave.

"There's been increased activity because there's been pent up buying frustration. What we've seen is a build-up of activity because interest rates are down, affordability is up, sellers have come to terms with prices, buyers have become more confident with the level the property market is at ... and that's what we'd expect to see over the winter, a market at more normal levels rather than the unrealistically low volume of sales which we've seen over the last 12 to 15 months."

First National northern region business development manager Lindsay Roberts, said sales were down on two years ago, but figures for Auckland and Northland had increased steadily in recent months.

The news does not appear to be so great for sellers.

Agents say the average house price was down 4.1 per cent on February's average price to $491,780, and down 5.8 per cent on the $522,336 average of March last year.

Agents say the March boom has left the pool of houses for sale scarce but the Real Estate Institute predicts the market will remain steady.

Economist Gareth Morgan said the sales figures were not something to get excited about.

"It's a long haul this whole recession ... I don't see the data as significant in terms of signalling any turning point.

"People are saying 'Let's go now. The prices might not be the lowest, but we've got to buy so let's go' ..."

His Infometrics colleague Matthew Nolan said the boom was not surprising as sales had been bad for so long they were bound to pick up.

"Sales were ridiculously low, it was unsustainable in itself."

He said the rest of the country would probably follow in Auckland's footsteps.

"Auckland was struggling a good year or so before the rest of the country.

"I'm confident Auckland's going to be the first place moving. There's just not enough properties in Auckland in the first place."

Shamubeel Eaqub, director of Australia and New Zealand investment research for Goldman Sachs JBWere, said the sales jump was consistent with mortgage approvals.

But it was not certain that the boom would continue, as the full effect of job losses had not fully flowed through to the economy.

The number of sales, while still low, showed "the first encouraging signs" of reaction to lower mortgage interest rates.

Real Estate Institute national president Mike Elford said Barfoot & Thompson's Auckland figures were similar to those around the country and with other real estate agents.

"It seems there's a lot more inquiry which is transposing into sales so certainly there's a notch up in the market.

"We have had traditionally quite light volumes so we need to be a little bit cautious but it seems there is a lot more optimism out there with buyers."

Barfoot & Thompson sales

Period: March 09

Sales: 924

Value: $ 454,405,513


Period: March 08

Sales: 632

Value: $ 330,116,531