Rising Auckland house sales drive listings to seven-year low
BUSINESSDESK: Auckland house sales jumped 28% last month, driving the number of listings down to a seven-year low, the city's biggest real estate agency says.
Barfoot & Thompson, which accounts for about a third of Auckland's housing market turnover, says the number of houses sold rose to 998 last month from 779 in July last year. That pushed the number of properties on its books down to 3975, the lowest since the end of 2005.
“The low number of properties for sale is being caused by high turnover, not by the low number of people listing properties for sale," managing director Peter Thompson said. "It has created a market in which people are prepared to act decisively."
The high turnover in Auckland houses comes as the country's biggest city struggles with a lack of supply and increasing demand. That has sparked fears the region may be in for another housing bubble unless something is done to expand the housing stock on offer.
July's average sale price increased to $591,444 from $530,191 a year earlier. In the past three months the average sale prices has increased about $9000.
“Prices are increasing, but they are not spiralling up," Mr Thompson said. "What is out of the ordinary is the number of properties being sold for this time of the year, and the speed at which they are being sold."
Mr Thompson said the number of homes sold for less than $500,000 rose 8.7% to 498.
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Comments and questions8
When Europe implodes, what then?
With the prices being paid now, being above 2007 levels the market appears to be a bigger bubble now than then. Events in Europe, US etc may see a big burst, but we still have demand in Auckland for houses which will only be met by supply when Auckland Council permits higher densities on all existing residential zoned land eg one dwelling per 300m2 or increases the MUL.
when europe implodes and the world economy falters - those in a house will at least have a roof over their heads and then the banks problem to get the money from the house owner as we all in same boat
Houses in the hot areas in Auckland are still cheap by world standards ( 3 bedroom house on section within 5km of the city - find another city in the world where prices are under 1 million on average , and it isn't all apartments )
You are presuming Auckland is a 'world' city. It is, of course, not. It is infact a big island town in world standards and doesn't even make it near the largest 300 cities in the world.
Lets compare apples with apples.
NO, let us divide the purchase price of a house in Auckland by the average hourly pay, then do the same for a "like" house in the city of your choice.
You may then have a more accurate idea of the "affordability" in Auckland comparative to the "affordability" in your "city of choice"!!!!
I believe at least some of the increase in price is the current lower cost of borrowing, and organic growth of Auckland; also as Europe and USA suffer, investors look to 'safe' places to put their money which is why SE Asia, NZ, Australia are all seeing property booms; some bigger than others. The threats are very strong kiwi dollar, rising interest rates, exodus of migrants, faltering Kiwi economy....the opportunity would seem to outweigh these threats. Also, the strength of rental yield in Auckland's better suburbs (and lack of rental property) also bolsters the longterm opportunity for Kiwi real estate. The fact that Auckland is a small city in the middle of nowhere is actually a good thing in the current world economy.
If Auckland prices were to implode, it would have occurred in 2008 when the global crisis tsunamied into this country, closing down countless companies, making rounds of huge redundacies , construction projects came to a screeching halt and retail shops were left swatting at flies.
Everyone keeps on blaming Council fees and land supply been the reasons why there is this so-called Auckland housing bubble - this is rubbish!.
Have a look on realestate.co.nz and you will see you can purchase a section in Papakura, Henderson, Swanson, Avondale, areas of Flatbush for under $170k so everyone saying 'there is a shortage of land' is rubbish!
Council has now locked in contribution fees been fixed of 27k - so this cannot be used anymore although I do agree there is still too much red tape
We have young professionals and young families who have no fear of a 80-90% LVR mortgage who want to live in Greylynn, Ponsonby, Westmere and like any other city in the world a premium is paid if you want to live in the trendy areas - Will a young professional couple want to purchase a new build 250sqm home in Flatbush for $540k? (which they can) Answer: No - therefore it is not land supply that is the problem. Does that same professional couple want to live in a 200sqm 3 level townhouse (brand new that can't sell) in Remuera for $950k. Answer: No - therefore it is simply a case of market forces in certain suburbs that is distorting everyones perception and the media not understanding.