The tide may be turning on falling values
The Auckland housing market has seen a significant jump in house sales volumes last month, according to the city’s largest realtors.
Barfoot & Thompson reported that the 473 house sales in April substantially increased to 723 in May – a change managing director Peter Thompson said was hopeful.
“Eager buyers returned to the Auckland housing market in May, with property sales being their best in a month since May last year,” Thompson told NZ Herald.
He said that following a dismal month’s trading in April, when sales slumped to their lowest in that month for 22 years, sales of 723 in May were not far off what was being achieved at this time of the year prior to COVID-19.
“May’s sales are another sign that the Auckland property market has either hit the bottom of the current cycle or is close to it,” Thompson said.
Sale prices flat
Sales prices did not increase, however. May’s median of $1.07 million was down from the $1.08m in April. The figure was also down from January and February’s $1.11m and the March median of $1.10m.
Thompson stressed sales volumes over prices.
“While both the median and average sales prices for the month eased on those for April, it was the number of sales that is the standout feature, with sales being a third higher than for the average monthly sales for each of the past three months,” he told the publication. “It shows buyers are not shying away from paying current mortgage interest rates.”
The NZ Herald recently reported that the tide may be turning on declining values following reports from OneRoof, CoreLogic, and ANZ Bank suggesting a possible floor being reached based on the latest real estate data.
According to the OneRoof-Valocity House Index, New Zealand’s average property value slipped 2.3%, or $22,000, to $950,000 in the May quarter, as the successive interest rate hikes put downward pressure on prices.
Auckland’s average value further slipped by 3.2%, or $43,000, over the quarter to $1.29m, while Northland, Otago, and West Coast enjoyed increases in their average property value. Canterbury, Taranaki, and Wellington saw an easing in the rate of decline.
CoreLogic data showed property values fell nationwide in May, but the rate of change had slowed down.
ANZ’s economists are now expecting annual house prices to lift by 0.1% in the December quarter – an earlier turnaround than the June 2024 quarter increase they predicted just last month.
Thompson said May’s median sales price of $955,000 was 4% lower than the April figure while the average price of $1,070,819 was 1.5% lower than that for last month.
“While the median price paid in May was down 15.1% on that 12 months ago, the average price was down much less at 10.9%,” he said. “Vendors will be encouraged that prices have now reached that point where more sales are being made and support the recent comments by the governor of the Reserve Bank that house prices are at ‘more sustainable’ levels.”
The agency listed 1,262 properties in May, near the average during the last three months.
Once sales numbers begin to increase, potential choice will likely start to decline, Thompson said.
“Buyers have returned to the high end of the market, with 31 homes being sold in May for more than $2 million, the second highest number of monthly sales in this price category this year,” he said.
Also in demand were sales in the under $750,000 price category, with 148 sales registered, NZ Herald reported.
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