Residential sales volumes last year were also much higher, data shows
Barfoot & Thompson has seen its unsold property inventories double in the last year, from 2,601 Auckland and Northland residential properties for sale last August, to 4,637 unsold properties last month.
Read more: How are we going to fix the Auckland housing crisis?
Auckland’s largest agency also said that in every month this year except January, it held more than 4,000 unsold properties on its books, compared to the 2,864 unsold properties last June and 2,629 last July.
Last year’s residential sales volumes, on the other hand, were significantly higher, usually more than 1,000 per month, compared to just 578 properties sold by the agency last month, just 611 in July, and just 684 in August, NZ Herald reported.
Average residential price in August stood at $1.15 million – an increase on July’s $1.1 million, but the median hardly moved from $1,110,000 in July to August’s $1,111,000.
Peter Thompson, managing director of Barfoot & Thompson, said Auckland house prices had plateaued in August while sales numbers remained low, meaning the monthly decline in prices ceased in August, with the median sales price for the month remaining constant with that for July while the average price increased.
“Previously, the average sales price had fallen four months in a row, but in August that trend was reversed with the average price over the previous month increasing by 3.1% to $1,157,899,” Thompson told NZ Herald.
Rather than signalling that prices are on the rise, this reversal likely indicates that prices are plateauing.
“The prices being paid in August are still below those being paid in August last year, but the average price was down only 2% and the median price down 1.7%," Thompson said. “Where the market is really seeing change is in the number of properties being sold, with sales numbers in August of 578 our lowest in a month since the COVID-affected sales months in mid-2020. Given that there are buyers in the market, the combination of low sales numbers and stable prices indicates that vendors believe prices are bottoming out. New vendors continue to arrive, and in August the agency listed 1,394 new properties, our highest number of new listings in the month of August for six years. At month-end, we had 4,637 properties on our books, our highest number of listings at the end of August for 11 years. With high new listings, including new builds entering the market for the first time and a solid base of existing properties, we enter the normally buoyant spring buying season with an excellent range of properties and choice for buyers.”
Around 18% of sales were for properties which sold for $750,000, while a mere 8% were for properties above $2 million.
NZ Herald recently reported the Financial Times asking if the New Zealand housing market is the canary in the coal mine. According to the UK business media outlet’s video, headlined “NZ house market: warning to the world?” economists globally are keeping their eyes on New Zealand’s housing market downturn because the nation could be leading the way in terms of a massive adjustment in valuations.
Read next: Why NZ's housing market downturn could be a “warning to the world”
New research from Goldman Sachs’s Australian-based Bill Zu also forecasted a 25% drop in NZ house prices. The report, headlined “More pain ahead”, noted the rapid cooling of NZ’s housing market, alongside what Zu said was the aggressive tightening cycle by the Reserve Bank’s monetary policy moves.
“We now expect a peak-to-trough price decline of around 20-25% before stabilising around late 2023 or early 2024,” Zu said.
Grant Swanepoel, Jarden’s equity research analyst, predicted an 18% drop in prices by the end of next year from a national average of $905,000 to $740,00, as he noted that Auckland prices are now down 16% from the peak, NZ Herald reported.
