Archive | Barfoots

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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Big rise in over-$1 million sales keeps Barfoots average & median up

Barfoot & Thompson managing director Peter Thompson said on Friday there was normally a dip in Auckland house sale prices in January, but this year both the average & median were marginally higher than in December for the first time in 14 years.

“At the same time sales numbers fell more than is usual, new listings were healthy and choice increased to its best level in a January for 3 years.

The big factor was the much higher percentage of $1 million-plus sales – 31.2% this January, 20.7% in January 2016 & 21% in January 2015, up from 10.7% in January 2014.

“The average sale price for the month was $913,938 and the median price $846,500. These prices reverse a 3-month sale price decline from the alltime highs set in October 2016.”

Mr Thompson cautioned against trying to read too much or future trends into sales data for January: “The market is still regaining momentum from the holiday break and it can lead to statistical anomalies.”

He said what came through across all price segments was that “tthere were no obvious signs prices were under great pressure to fall. At the start of this year buyers enjoyed greater choice than has been the case at this time of the year for 4 years.

“Sales numbers in January, at 629, were their lowest in any month for 5 years while new listings, at 1142, ensured choice remained high. At the end of the month we had 3620 properties on our books.

“During the month 79 properties, or 12.5% of sales, were for under $500,000.

“Sales of rural & lifestyle property in January mirrored those for residential houses, with 49 properties sold. Prices achieved remained in line with those being paid in December, with a high level of new listings coming to market.”

Attribution: Agency release.

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Barfoots chief says rise in house prices has stopped

Barfoot & Thompson managing director Peter Thompson said yesterday “a typical, solid December’s trading” had confirmed that Auckland residential property prices had stopped rising.

“December’s average sales price at $913,709 and the median price at $840,000 were both down for the second consecutive month.

“It was a typical December trading period, with sales numbers & new listings in line with those for the previous year, and prices being not far off the record prices of October & November.

“Signs that the rate at which prices were increasing was declining have been there since mid-year, and that decline showed in the prices achieved at year end. In December, the average price declined by 2% when compared to the average price for the previous 3 months. For the median price the reduction was 1.8%.

“While prices definitely eased, there was certainly no suggestion that current prices are under any great downward pressure and normal sales numbers are being achieved.”

Mr Thompson said the modest December retreat was similar to what happened in December 2015. On that occasion, it took until March for the upward price trend to reappear.

“New listings at 776 were the lowest in a month for the whole year, but were the highest in a December for 5 years.

“Year-on-year, the average sales price increased by 8.6%, the lowest for 4 years. It compares with 13.9% in 2015, 10.3% in 2014 and 11.1% in 2013.

“For the median price, the 2016 increase was 8.9% compared to 17.4% in 2015, 11.1% in 2014 and 12.6% in 2013.

“At year end we had 3270 properties on our books. While this number is down on those at the end of October & November, it is the highest number at year end for 4 years, and more than a third higher than it was at the same time last year.

“Sales of million dollar properties remained strong in December, with sales in this price category at 282 representing 39.1% of the month’s sales.

“Sales of properties for under $500,000, at 52, represented 7.2% of the month’s sales. Throughout the year, 11.1% of all the properties we sold were for under $500,000.”

Attribution: Agency release.

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Barfoots chief says “right property” still getting asking price, but…

Barfoot & Thompson managing director Peter Thompson said yesterday buyers in the Auckland residential property market had become more selective, “but for the right property are prepared to meet the auction reserve or asking price”.

That runs counter to my observations in Barfoots’ & other auctionrooms, where protracted negotiations during auctions in the last month have often resulted in reserves being lowered and, in some cases, buyers still baulking.

The willingness to lower reserves sooner than usual as a boom recedes is perhaps the result of vendors selling at the end of a boom still seeing a slight reduction as being well ahead of normal price expectations.

Mr Thompson said yesterday: “In October, the rare situation developed where the average sales price set yet another record while sales numbers fell to their lowest in an October for 5 years and available property for sale reached its highest number at month-end in 3 years.

“It is a combination of factors that hasn’t come together for many years. The last time sales numbers fell this low in an October was in 2011, when the market was still not fully recovered from the 2007 global financial crisis.

“It is yet another sign the Auckland market is losing its forward momentum. In October, high-end buyers were not put off by prices if the property represented value for money, and 39.2% of the homes sold were for in excess of $1 million.

“This is the first time this year properties selling for more than $1 million have represented close to 40% of sales. Normally the number is in the mid-30s.

“This high-end activity lifted the average sales price to $943,801, an increase of 2.6% on that for September, and 12.3% on that for October last year.

“Sales numbers in the month fell to 778, more than a quarter lower than those in September and also a quarter lower than the average for the past 3 months.

“Where buyer resistance to prices has been felt most is in the under-$1 million price category. Greater choice has created an environment where buyers feel less pressure to pay the asking price.

“This is reflected in the median sales price for the month, which increased by 1.8% in the month to $865,000. This compares with the average price increase for the month of 2.6%.

“The average median price increase over the past 12 months now stands at 10.9%, compared with 17.4% for the 2015 calendar year and 11.1% for 2014.”

Mr Thompson said the new loan:value ratios investors must meet had a significant impact on sales in the under-$500,000 price category: “In spite of there being a reasonable selection of properties available, only 40 homes, or 5.1% of all properties, sold for under $500,000.

“With the normal spring lift in sales activity failing to arrive this year, the relationship between buyers & sellers has moved into a more balanced position.

“At month end we had 3711 properties listed, 21.3% higher than at the end of September.”

Attribution: Agency release.

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Barfoots chief says house price slowdown more apparent

The biggest residential real estate agency in Auckland, Barfoot & Thompson, said yesterday the signs of a slowdown in price increases had become more apparent.

Managing director Peter Thompson said: “August’s price increase was restrained, for both the average price and the median price.

“The slowdown is not so obvious when comparing August data with that for July, but when you look at the average for the previous 3 months it becomes more apparent. “The average sale price in August was $906,560. While this was up 4.5% on that for July, it was up only 2.6% on the average price over the previous 3 months.

“Our data shows that those claiming the average price is on the verge of topping $1 million are over-inflating where prices are heading. While prices continue to rise, for the past 5 months buyers have not been prepared to pay more than they believe is the market price. The same trend can be seen with the median price, which at $850,000 for August is up 1.2% on July’s, and up 2.5% on the average for the previous 3 months.

“Current price increases are relatively modest compared with what has occurred in recent years. The slowdown can also be seen when comparing August’s sales numbers, listings at month end and new listings with the average for these statistics for the previous 3 months. Sales numbers were down 9.2%, available properties up 6% and new listings remained at the same level.

“It has led to a small increase in the choice available for buyers. It all adds up to some heat coming out of the market.

“The continued rise in prices with lower sales indicates that new regulations requiring investors to have greater equity than previously, which the trading banks enforced at the start of August, has had a limited impact on prices but may have affected sales numbers.”

Mr Thompson said sales fell to 1003 in August – down 3% from 1034 in July, down 9.2% from 1139 in the previous 3 months, down 25.5% from 1388 a year ago. 347 properties (34.6%) sold in August for over $1 million, 109 (10.9%) for under $500,000.

The average price was $906,560 – up 4.5% on the $867,681 in July, up 2.6% on the $883,549 in the previous 3 months, up 10.4% on the $821,079 a year ago.

The median price was $850,000 – up 1.2% on the $840,000 in July, up 2.5% on the $829,500 in the previous 3 months, up 12.6% on the $755,000 a year ago.

The agency’s 1706 new listings were up 19.6% on the 1426 in July, up by 6 on the average 1700 over the previous 3 months and down 4% from 1777 a year ago.

The agency had 3151 residential properties available at the end of August, up 4.6% on the 3012 at the end of July, up 6% on the 2987 average of the previous 3 months, up 6.6% on the 2957 a year ago.

Mr Thompson said the real test of where prices are heading would come this month with the arrival of spring: “For the past 3 years, September’s average & median prices have exceeded those for August, with prices then continuing to increase to year end.”

Attribution: Agency release.

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Barfoot chief says slowdown unmistakable

Barfoot & Thompson chief executive Wendy Alexander said on Wednesday the Auckland housing market was showing unmistakable signs that prices were stabilising, and might even be plateauing, for the first time in 5 years.

“There has been a definite change in the market in the last month,” she said. “The average price in July was $867,681, a fall of 4.5% from that for June, but more significantly 2% below the average price for the previous 3 months.

“The trend is not as evident in the median price, which at $840,000 was the same as in June and 2.1% higher than the median price for the previous 3 months.

“The winter months, school holidays & a slowing in the number of new listings all contributed to the slowdown in July, but buyer determination to pay whatever is necessary to achieve a property was tempered. Buyers remain prepared to pay a fair price, and under-the-hammer sales at auctions of 70% were still high, but sales activity is slower than it was at the same time last year.

“In the 3 months of May-July this year we sold 3508 properties. In the same period last year we sold 3780, a 7.8% difference. The year-on-year increase in prices is still occurring, but at a much slower rate than we have seen in the past 4 years.

“The average price has increased by 5.3% over the past 7 months, compared to 2015’s full-year average price increase of 14%. The median price increase over the past 7 months has been 6%, compared to 17.4% for 2015.

“Whether price increases will continue in the remaining months of the year is unclear. Normally, prices rise as we enter the spring/summer months, but the Reserve Bank’s new regulations affecting investors will start to have an impact from August on.”

Barfoot & Thompson sold 1034 residential properties in July, down 11.5% from 1168 in June and down 25.5% from 1388 in July last year. New listings at 1426 were down 19.4% from 1770 in June and down 19.6% from 1777 in July last year. At month end, the agency had 3012 properties on its books, up 2.6% on the 2936 in June and up 7.5% on the 2802 in July last year.

During July Barfoots sold 383 homes (37%) for over $1 million and 94 (9.1%) for under $500,000.

Attribution: Agency release.

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