Stats indicate sagging market: Economist

Barfoot and Thompson’s latest statistics point to a “steadily sagging” market, Westpac’s economists say.

Tuesday, August 5th 2014, 12:00AM

by The Landlord

For the second consecutive month, the number of homes sold by the agency in July in Auckland fell.

Prices remained stable but by the end of the month, the number of listings was at a seven-month low.

“The average sales price in July reached $719,312 for the month, which was less than a 1% increase over June’s average price,” managing director Peter Thompson said. “Sales values over the past four months have been moving around after reaching an all-time high of $725,708 in March. In April and May they edged down, and while they recovered some lost ground in June and again in July, prices have certainly not returned to those being achieved in March. Prices at present are best described as steady.”

He said that was partly because of a normal winter downturn and because of the looming election.

“The housing market invariably goes quiet during a run in to an election. After improving modestly in the first four months of the year, by the end of July the supply situation had again become extremely tight with only 3273 properties on our books, the lowest number for seven months. We normally see new listings increase during August as vendors prepare to take advantage of the increase in sales activity as spring approaches. However, with a general election in September, the potential exists that trading in August may not follow the normal pattern as the market awaits the election outcome.”

Nearly one in every six homes sold went for more than $1 million, he said.

“Sales of homes in this price segment are currently running 28.7% ahead of where they were last year after the first seven months of the year. Investing in a home to improve lifestyle has always been a strong feature of property buying in Auckland, and buyers with the financial resources to do so are still active in the top end of the market.”

Another 29.4% of homes were sold for less than $500,000.

Westpac chief economist Dominick Stephens said: “This data points towards a steadily sagging Auckland housing market, contradicting evidence of a modest recovery we had detected elsewhere. We shall monitor other metrics of the market in July as they come available.”

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