Archive | Barfoots

Barfoots study finds residential rents up average 4.7%, double that in central areas

The average weekly residential rent in Auckland has risen by 4.7% in the last year, from $520 to $542/week for a 3-bedroom home, according to Barfoot & Thompson’s third quarter figures.

Director Kiri Barfoot, who oversees the company’s property management division, didn’t put a figure on how much landlords’ costs had risen, but did list several: “We are just coming out of winter, which is a maintenance-heavy period for rental properties. Add to that uncertainty around rates increases, increased insurance costs due to the fire service levy and the incoming Earthquake Commission levy, compliance costs for smoke alarms & insulation, and you can understand the context of rent increases.

“Many owners will be relieved at recent forecasts indicating that interest rates are likely to remain flat in the near future.”

She said the biggest average rent rise was in the central suburbs, up 6.2% in a year from $550 to $584/week.

“Demand for rentals in Ponsonby, Grey Lynn, Mt Eden, all the old Auckland City suburbs west of the Southern Motorway, is strong. The area boasts short commutes into the city, and the properties often have outdoor space, parking, and are close to shopping, dining & entertainment areas. At the same time, fewer new properties are being built because of high land costs when compared with other areas where denser residential developments can be constructed, or where land costs are lower.”

Ms Barfoot drew a distinction between movements in house prices & rents: “I wouldn’t expect rent to flatten out as house prices in Auckland have. Just as Auckland rents didn’t increase at double-digit rates along with house prices last year, or the year before.”

Would-be home buyers pushing up one-bedroom rent prices

In a comparison of the number of bedrooms, Ms Barfoot said the biggest suburban increase had been for one-bedroom homes, up 6% from $339 to $359. In the central suburbs, the average rise for one-bedroom rentals was 9%, from $339 to $370/week.

“Almost 60% of renters plan to buy a home in the next 2-5 years, but we know that saving for a 20% deposit and tough lending restrictions are delaying people from buying. In the meantime, people are taking an interim step – choosing to rent on their own in between flatting and the traditional first-home buying stage. They are prepared to pay a little bit more for privacy, and are fortunate to have plenty of new developments to choose from.

“In Auckland Central, where a large number of apartments have become available in the past couple of years, rent for one-bedroom properties has increased at the same rate as the city-wide average, showing that the demand is there. Many of these new apartments have been in the higher end and will appeal to people moving on from a flatting situation, but who are yet to buy a place of their own.”

Attribution: Agency release.

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Barfoots chief says most home buyers & sellers being realistic about changed market

Barfoot & Thompson managing director Peter Thompson reckons most home buyers & sellers have been realistic over the last few months, when sales have dropped away.

He said yesterday sales by the agency were down by two-thirds compared to a year ago, but buyers & sellers who accepted that change were still doing deals.

“For the past 6 months there have been only minor variations in the pattern of lower sales numbers & prices remaining firm. Both average & median sale prices were up from July but down from the average of the previous 3 months.

“Those who are looking to get a bargain, or selling at way above market, are missing out.

“The current market is having only a modest impact on the top & lower ends of the market. In spite of claims that there are few homes for sale in Auckland at under $500,000, in August we sold 90 properties in this price category, representing 11.6% of all sales for the month. High-end properties continued to sell well with 276 sales, or 35.5% of all sales, being for in excess of $1 million.

“There was no shortage of new property reaching the market, with 1260 new listings in August. While down 15.5% on the average number for the previous 3 months, this is not unexpected one month out from a general election.

“At month end we had 3993 properties on our books, the lowest number for the past 6 months but still more than a quarter higher than at this time last year. It means we enter the general election month with the highest number of properties at the start of a September for 6 years.

“It provides a good platform for the market to operate from once the election is behind us. With a well performing economy, relatively low mortgage interest rates & strong population growth, there is every reason to anticipate over the medium term the housing market will retain people’s confidence.

Rural activity

“Prices for rural property in Warkworth & Wellsford to the north of Auckland and in Drury & Pukekohe to the south remain stable, with limited listings holding back sales numbers. The normal spring demand for rural properties is anticipated to return once the election is over. Demand remains from active, well financed investors for rural development land.”

The figures, with the percentage change to August in brackets:

Average price: August $918,926, July $908, 319 (1.2%), average over 3 months May-July $921,547 (-0.3%), August 2016 $906,560 (1.4%)
Median price: August $820,000, July $810,000 (1.2%), average over 3 months May-July $832,000 (-1.4%), August 2016 $850,000 (-3.5%)
Sales: August 777, July 747 (4%), average over 3 months May-July 829 (-6.3%), August 2016 1003 (-22.5%)
New listings: August 1260, July 1173 (7.4%), average over 3 months May-July 1492 (-15.5%), August 2016 1706 (-26.1%)
Month-end available stock: August 3993, July 4088 (-2.3%), average over 3 months May-July 4227 (-5.5%), August 2016 3151 (26.7%)

Attribution: Agency release.

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Residential yield rises after 3-year decline

Auckland’s average residential rental yield has risen after a 3-year decline, real estate agency & rental manager Barfoot & Thompson said yesterday.

Average rent for the second quarter of 2017 was up by 4.9% on a year ago.

The Barfoots research showed gross rental yields for 3-bedroom homes were up in over half the city’s suburbs, to an average return of 3.04%. Director Kiri Barfoot said: “On the whole, this is good news for rental property owners. A change in direction of rental yields is exactly what you would expect to happen at some point in response to moderate, but consistent increases in rent, and slowing of house sales prices.”

Gross rental yield is typically calculated by dividing annual rent by sale price. A hypothetical home bought for $100,000 & renting for $3000/year thus has a 3% yield.

Barfoot data showed the average rent for a 3-bedroom home in Auckland was $537/week at 1 July, or $27,924/year, while the average 3-bedroom sale price was $917,415, giving a gross yield of 3.04%.

“While that’s only slightly up on 2016 for the same period, which had a gross yield of 3.00%, it does arrest the fall in yield seen since 2015, when the citywide average was 3.25%, and 2014, when it was 3.7%.

“The upward trend in rental yield was most obvious in the central suburbs – which include most of the old Auckland City suburbs west of the Southern Motorway – as well as on the North Shore.”

In the central suburbs, the average gross yield rose from 3.94% to 4.28% as yields increased from 2016 in 13 of the 19 suburbs surveyed. Top performers were Ponsonby, up from 2.27% to 3.19%; Grey Lynn, up from 2.58 to 3.05%; and Onehunga, up from 3.03% to 3.15%.

Suburbs continuing to trend downwards included Westmere, down from 2.87% to 1.80%, and Mt Eden from 2.66% to 2.22%.

On the North Shore, yields rose in 12 of the 15 suburbs surveyed. Rothesay Bay had the biggest rise, up from 2.94% to 3.79%, while Albany climbed from 3.11% to 3.38%.

Ms Barfoot said it was more of a mixed bag in Auckland’s south & west, where about half the suburbs rose, but yields for most still remained better than the citywide average.

In West Auckland, yields climbed or stayed the same in 9 of the 16 suburbs surveyed, and all but 2 were above the city average. Royal Heights was the top earner,up from 3.61% to 3.88%, while Te Atatu Peninsula had the biggest proportionate rise, from 2.78% to 3.06%. In 7 suburbs, the downward trend seen since 2014 continued. The biggest fall was in Swanson, down from 4.23% to 2.74%.

In South Auckland, yields improved in just 5 of the 14 suburbs surveyed, but were above the regional average in all but one. Yields picked up in Manurewa (from 3.84% to 4.12%) and in Mangere (from 3.23% to 3.89%). The 2 top earners were suburbs which had kept trending downwards since 2014, Otara & Clendon Park, both with 4.38% gross yields this year.

3 of the 13 eastern suburbs recorded increases in gross yield, the best being Ellerslie, which climbed from 3.03% to 3.08% and was the only one with a yield over the average.

In Rodney, the yield rose in only one of the 6 suburbs surveyed, Red Beach (from 3.32% to 3.41%).

Rents continue steady upward trend

Across Auckland, average rent increased by 4.9% in the June quarter, compared to a year earlier. Average rent across all property types & locations was $531/week, up from $506/week.

Average rent rose more than average in Rodney (6.9%), the central suburbs (6.4%), South Auckland (5.8%) & the eastern suburbs (5.6%), but less in West Auckland (2.4%), central Auckland (3.1%), Pakuranga/Howick (3.1%), North Shore (4.1%) & Franklin/rural Manukau (4.3%).

For new tenancies, average rents rose more than the total city average in just Franklin/rural Manukau (9%) & Rodney (8%). Rents for new tenancies rose 3% in South Auckland and 1% in West Auckland.

“The citywide average of 4.9% this quarter is slightly down on the 5.2% increase recorded the year before, between the same quarters in 2015 to 2016.

“Rent isn’t as closely tied to property sales prices as people might expect. It is more closely aligned to people’s income and the landlord’s overheads for the property. Rent increases remain fairly consistent at or around 5%.”

Attribution: Agency release.

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Barfoots chief says sales decline finally affecting home prices

Barfoot & Thompson managing director Peter Thompson said on Wednesday the fall in sales was finally having an effect on Auckland residential property sale prices.

“In June the average sales price was $913,606, a 3.1% fall on the average price for the previous 3 months, and only 0.6% higher than it was 12 months ago. The median price for the month ($840,000) was down 2.9% on the average median price for the previous 3 months ($865,000) and the same as it was for the same month last year.

“While prices invariably fall as we head into winter, June’s results confirm that prices are definitely falling. Monthly sales numbers have been below the previous year’s numbers for 9 consecutive months, and that is finally having an effect on prices.

“What is positive for the market is that prices are edging down rather than falling rapidly, and at current prices still represent a good outcome for vendors. Sales numbers in June, at 855, were down 3.5% on sales in May and down 26.8% on the number in June last year.

“Sales for the month were their lowest in a June for 7 years. New listings last month, at 1570, were relatively strong and the listing numbers at month end, at 4297, were the same as the previous month.

“That total listings have not risen as sales numbers have fallen is because some vendors have taken their property off the market. Taking property off the market when prices are not rising is a common trait in Auckland and will contribute to prices remaining stable through to September’s election.

“There was a good balance of sales across all price ranges in June, with the sales numbers for property for under $750,000 representing 41% of all sales.

“291 sales, or 34% of all sales, were for property over $1 million and, of these, 39 or 4.6% were for property selling for over $2 million.

“In the Far North, rural sales remain strong, with demand for dairy farms remaining high.

“Family buyers & developers continue to be active in the lifestyle & city fringe markets, with new listings in this rural category being lighter than normal.”

Attribution: Agency release.

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Barfoots chief says home sales up since April and prices holding

Real estate agency Barfoot & Thompson’s residential sales rose from April to May but were well down on a year ago, and managing director Peter Thompson said prices showed no signs of retreating.

My impression from frequent visits to the agency’s city auctionroom has been that vendors have been prepared – some very unwillingly – to forgo at least some of the windfall gains made from general price escalation over the last 3 years, but that might still mean prices are above the level of a year ago.

Mr Thompson said: “The average sales price for the month at $942,717, and the median price at $846,000, remained rock solid.”

Sales were heavily weighted toward the high end – 38.5% (341) of May sales were for over $1 million, 6.5% (58) for over $2 million, 4.5% (40) for under $500,000.

“With a sound number of new listings, total listings at their highest for 5 years and low sales, there was greater pressure on prices to fall than has been experienced for some years. However, the average & median prices have barely moved over the previous 3 months.

“On a year-on-year basis, the average price is now running under 8% higher and the median price is 4.5% higher.

“For the first 5 months of this year, sales numbers are down about a quarter on what they were for the same period last year. The vendors who are achieving a sale are those who accept that prices are flat, and are likely to remain that way until the September election is behind us.”

Mr Thompson said new listings were down 6.6% compared to the average over the previous 3 months, and 9% lower than in May last year, but rose by a third from April: “It suggests the price slowdown is not leading to a greater number of people than normal listing their property for sale. Total listings at 4298 were up a little on last month’s, but more than 40% higher than at the same time last year.”

Barfoots’ residential statistics for May, (with April 2017 & May 2016 figures in brackets, with the percentage shift):

Average sale price: $942,717 (up 2.8% on $917,079, up 7,8% on $874,623)
Median price: $846,000 (down 0.5% from $850,000, up 4.5% on $809,500)
Sales: 886 (up 33.4% on 664, down 32.2% from 1306)
New listings: 1734 (up 34.1% on 1293, down 9% from 1905)
Month-end available stock: 4298 (up 2% on 4214, up 42.6% on 3013)

Attribution: Agency release.

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Rents up 4.6%/year on 1% vacancy rate

Real estate agency Barfoot & Thompson said yesterday the vacancy rate on its portfolio of 14,000 rental properties had been steady at 1-2% for at least a year. That means properties are empty for only 5 days between tenants.

Director Kiri Barfoot said average rent increased by 4.6% in the first quarter of 2017 compared to that quarter last year, and the average weekly rent for a 3-bedroom home rose from $509 to $531.

For new tenancies, the average rent had increased by 7%.

Barfoots’ data showed that for every rental property that became available, on average there were 44 prospective tenants. The agency’s property management division received 107,268 enquiries during the first quarter.

Ms Barfoot said the agency introduced online booking for rental property viewings in 2015: “Tenants are able to enquire about a property anytime and questions can be responded to around the clock. It has streamlined the entire process for renting by opening up communication, giving automatic reminders for viewings and providing an easy link for people to apply for a property with no paper forms required.

“The system has also given us data on rental property demand. On average around 20 people register online to view a property, but we’ve seen incredibly high demand in some instances. A record 105 people registered online to view a single rental property in Epsom recently.”

Ms Barfoot said that, as of Monday, the agency had just 209 homes available for rent in the central & eastern suburbs of the isthmus: “Most central suburbs have 3 or fewer properties for renters to choose from. The situation is replicated across the rest of Auckland. On the North Shore there are 77 properties, in Waitakere 71, and in Manukau 133.

“We are Auckland’s largest private property management provider. The number of properties we manage has been increasing 9% year-on-year, so it’s not a matter of fewer listings; rather, there are simply not enough rental properties to go around.”

Average rent rising faster for new tenancies

She said average Auckland rent continued to rise at a relatively reasonable pace despite the high demand for rentals, increasing property sale prices and more restrictions on finance for buying properties.

Around the region, renters paid about 4.6% more on average in the January-March quarter of 2017, compared with the same quarter the year before. Average weekly rent across all property types and locations was $531, up from $508.

Average rent rose more in South Auckland (6.4%), and slightly less in Central Auckland (2.8%), Franklin/Manukau (3.2%) & Pakuranga/Howick (3.4%).

For new tenancies only, average weekly rent rose 7%, from $533 in the first quarter of 2016 to $571. Annual increases later in 2016 were 6.1% in the second quarter, 2.4% in the third & 4.6% in the fourth.

“There are fluctuations in rent for new tenancies; however, rent for new tenancies is rising. Landlords are having to face the reality of needing cashflow to maintain & improve their property, cover increasing insurance & rates, and to prepare for increasing interest & compliance costs.

“Landlords typically own one, maybe 2 properties. Residential property is a conservative investment and landlords don’t like increasing rent. They prefer a trustworthy long-term tenant who pays the rent on time and looks after the property. When a property is vacated, this is a far better time to balance costs versus incoming rent.”

One- & 2-bedroom rents continue to lead increases

Ms Barfoot said the largest rent increases in terms of property size were for one- & 2-bedroom homes for the last 2 quarters. For the first quarter of 2017, one-bedroom properties averaged $348/week (up 5.5% from $330 in the first quarter of 2016), and 2 bedrooms $437 (up 5.1% from $421).

A 3-bedroom home averaged $531, rising less than 1% on the previous quarter ($525) and 4.3% on the same quarter in 2016 ($509), while 4-bedroom homes brought in $666 (up 3.8% from $641) and 5+-bedroom homes averaged $826 (up 3.7% from $796).

Attribution: Agency release.

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Barfoot home sales slump but price fall slight

Barfoot & Thompson’s average & median house sale prices both dropped over 5% from March to April, sales fell 40% and new listings fell 35%.

The agency’s managing director, Peter Thompson, said on Wednesday sales fell to their lowest level in an April since the 2008 global financial crisis, but lower turnover had a limited impact on values: “Sales numbers in April were down by about a third compared with the average for the previous 3 months, yet, given this significant fall, the average & median prices held steady. The median sales price at $850,000 for the month was down only $5500 on the average median price for the previous 3 months. The same trend was there around the average price, which at $917,079 was down only $25,000 on the average for the previous 3 months.

“While prices have declined from March’s all-time record highs, the fall relative to the average for the first quarter of this year is modest, and on a year-on-year basis the median price is up 3.7% and the average price is up 5%.

“It is a changed market from what we have been experiencing for a number of years and you have to go back 9 years to find an April in which fewer homes were sold.”

Mr Thompson said new listings in April were excellent at 1292 and, combined with lower sales, this allowed stock numbers & buyer choice to remain high: “At month end we had 4214 listings on our books, close to what it has been at month end each month this year, but 48% higher than it was at the same time last year.

“The decline in sales numbers was felt evenly across all price ranges, with more than a third of all sales being for more than $1 million. Sales of property under $500,000 accounted for 6% of all sales.”

Attribution: Agency release.

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Barfoot home sales & prices jump in March despite low auction clearance

Barfoot & Thompson managing director Peter Thompson presented a rosier picture of the Auckland residential market this week than he’s been able to do for several months.

After a quiet 2 months, March sales were up, the average & median prices were new monthly records, choice during the month was the greatest in 4 years, auction clearances were down to about 40% but post-auction negotiations made up for some of that decline, and 40% of sales were for over $1 million.

In March, the average sale price hit $968,570, up 4.8% on the average for the previous 3 months, up 2.5% on February and up 11.7% on the $866,782 in March last year.

The median, at $900,000, was up 7.7% on the previous 3 months, 9.8% on February and 12.8% on the $798,000 a year ago.

“The March rise in activity can partly be attributed to the high level of choice available. While the number of properties for sale at month end, at 4413, was down 2.9% on the number at the end of February, during the month an additional 1983 new properties were listed and choice during the month was greater than it has been for the past 4 years.”

Mr Thompson said clearance under the hammer at auction was down to about 40%, but more sales were agreed in post-auction negotiations.

The agency’s 1110 sales in March were double the 556 in February and up 75% on the average over the previous 3 months.

451 of the March sales (40.6%) were for over $1 million, and 67 (6%) were for over $2 million.

At the other end of the market, 99 sales (8.9%) were for under $500,000.

Attribution: Agency release.

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Barfoot home sales down but average price a record

Barfoot & Thompson said on Friday its average sale price for residential properties reached a record high of $944,574 in February while sales were at their lowest in 6 years and available choice was at its highest for 5 years.

The previous average sale price record, set last October, was $943,801.

Director of the real estate firm Kiri Barfoot said: “Experience has taught us to be cautious about reading too much into a single month’s trading results, particularly in February when a good portion of the sales relate to property negotiations that took place over the extended holiday break.

“What is clear from the results is that prices at the top end of the market were not under downward pressure, with the average sales price increasing by 2.6% on the average price for the previous 3 months. Compared to February 2016, the average price was 14.9% higher.

“Competition for properties around the $1 million mark was strong. In February, 187 – or a third of all sales – were for in excess of $1 million. Sales numbers for properties sold in excess of $750,000 were also in line with the numbers sold in 2016 & 2015.

“Conversely, sales under $750,000 were down a third on those for 2016 and under half those in 2015. The lower number of sales in the under-$750,000 price category brought the median price for the month down to $820,000, its lowest level since May 2016.

“The median price in the last 3 months has declined by 3.1% but remains 11.1% higher than it was 12 months ago.

“The number of new listings for February, at 2295, was our highest ever in a February and, combined with the low number of sales in the month, saw available listings at month end at 4546. The last time we had more listings on our books than this was in 2012. Based on buyer interest, this situation may be short-lived.

“At present, the market has divided around the $750,000 mark. Above this point sales numbers & prices remain consistent. Below it, uncertainty has developed as to whether asking prices represent value for money, and sales numbers have fallen.”

Barfoots’ figures in February (January & February 2016 in brackets):

Average price: $944,574 ($913,938, $822,024)
Median: $820,000 ($846,500, $738,000)
Sales: 556 (629, 698)
New listings: 2295 (1142, 2060)
Month-end available stock: 4546 (3620, 3318)

Attribution: Agency release.

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Agency says rents slow to rise

Barfoot & Thompson said yesterday average Auckland residential rent has risen at a relatively reasonable pace despite high demand for rentals, rising property sale prices and long-term interest rates tipped to go up.

Based on the latest data from its property management division, Auckland renters paid about 4.4% more on average in the December quarter, compared with that quarter of 2015. Average weekly rent across all property types & locations in Auckland was $524, up from $502 in the fourth quarter of 2015.

Average rent rose more in South Auckland (6.3%) and slightly less in central Auckland, (2.6%) Franklin/Manukau (3.1%) & Pakuranga/Howick (3.3%).

Barfoot & Thompson director Kiri Barfoot said: “Rents have risen at quite a modest rate given the record house sales prices we saw last year. Most property owners would prefer a trustworthy long-term tenant, paying rent on time, to asking for higher rent.

“Landlords obviously consider the return on investment, but are very conscious an empty property doesn’t pay rent. This is why we don’t tend to see tenants being hit with large rent increases, even when house prices or interest rates rise.”

She said rent was determined by property location, size & number of bedrooms, as well as taking into account desirable features such as internal garaging & sunny outdoor spaces.”

Over $300 for one bedroom, no matter where

The largest rent increases in terms of property size were for one- & 2-bedroom homes: “For the first time, the average rent for a one-bedroom property in all areas of Auckland passed $300, ranging from $302 in Manukau/Franklin to $373 in central Auckland. However, 3-bedroom homes are the most common rental and the best reflection of what the overall market is doing.”

The average rent for a 3-bedroom home during the December quarter was $525/week, rising less than 1% on the September quarter ($520) and 4.4% on the December 2015 quarter ($503). Rent for a 3-bedroom home ranged from an average $419 in Franklin/Manukau to $887 in central Auckland.

One-bedroom properties averaged $344 (up 5.1% from $327 in the December 2015 quarter), and 2 bedrooms $437 (up 5.1% from $416), while 4-bedroom homes brought in $658 (up 3.4% from $636) and 5+ bedroom homes averaged $812 (up 3.2% from $787).

Management demand grows

Ms Barfoot said property owners were turning to professional property managers in droves to mind their investments. Barfoot & Thompson was managing 9% more rental properties at the end of 2016 than in 2015, and 12-16% more in Franklin, Rodney, central & south Auckland.

“Typically we sign on around 450 new properties every month. There are 2 clear trends. The first is a desire for professional management in areas further north & south as rental demand increases beyond the traditional city limits. The second is owners coming to us as developments are being completed in the central city.”

Attribution: Agency release.

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