Archive | Barfoots

Sales down, but Barfoots chief sees steady start to year

Barfoot & Thompson managing director Peter Thompson said in his monthly market report on Monday that the start to 2018 was steady – sales low, but prices agreed that were consistent with those in the last quarter of 2017.

“This stable trading trend first emerged in April last year and has rolled over to the start of the new year. In January, the average price for sales was $934,753, 1.5% higher than the average for the previous 3 months, while the median price at $830,000 was 1.6% lower than the average for the previous 3 months. Variations of 1.6% or less across a 4-month period represent very little change.

“Sales numbers at 593 were light for the month, down 13.8% on the average of the previous 3 months and down 5.7% on those for January last year. However, given January’s short & holiday-interrupted trading period, caution needs to be attached to drawing strong conclusions from the month’s sales.

“Sales of home in the high-end categories of $2 million at 27 and $1 million at170 were consistent with the number of sales in these price categories in January last year. Sales of properties for under $500,000 fell from 13% of all sales in January 2017 to 8% of sales in January 2018.

“New listings in January, at 1200, were strong and were 5.1% higher than in January last year.

“At the end of the month we had 4320 properties on our books, the highest number of listings at the end of January for 6 years.

“Auctions continued to be the main sales method, with clearance under the hammer averaging 50%.

“The outlook for residential housing for the first half of 2018 is positive. With prices having plateaued, stable mortgage interest rates and the potential that greater access to mortgage finance will be made available to first-time buyers & those on limited income, sales numbers can be expected to grow as we head into the traditionally strong February-August sales period.

“The same situation exists for rural & lifestyle property sales. With buyers being selective & taking their time, sales activity in this sector was quiet in January. There was a strong level of buyer interest, and a solid level of quality new listings, including a number of dairy farms.

“Interest in small to medium-sized commercial property was strong in January, and our sales for the month at $78 million were the highest on record for the month of January.”

The figures:

 

Attribution: Agency release.

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Agency records residential slowdown, but prices still rising

Barfoot & Thompson managing director Peter Thompson said this week the agency’s average selling price of Auckland homes continued to rise in 2017, but at the lowest rate in 5 years.

He said the era of rapid price increases had been reined in and the market had settled into a more stable trading environment.

“In 2017 the average selling price increased by 4.5% to $926,632 and the median selling price by 2.7% to $843,583. [Those figures are for the whole year, distinct from the monthly figures charted below.]

“What did change significantly in 2017 was the number of homes sold, which fell by more than a quarter on the numbers sold in each of the previous 3 years. The sense of urgency to buy a property regardless of its asking price has disappeared. It has been replaced by buyers taking a more considered approach.

“Normally when sale numbers fall by such a large percentage, prices retreat from their record high levels. But this has not occurred, and prices have continued to rise modestly. It underlines there is still buyer support at current prices.

“In part, this was aided by the recent release of new capital values by the council as sellers & buyers have the same information as to the potential value of a property.

“In December we sold 674 homes, a number in line with the number we sold each month for the previous 3 months.

“However, the average sales price for December at $939,871 was 2.6% higher than the average for the previous 3 months and the fourth highest on record.

“The median price in December at $870,000 was 3.6% higher than that for the previous 3 months and the second highest on record.

“Undoubtedly, the measures progressively introduced by the Reserve Bank, a more prudent approach to mortgage lending by the trading banks and a growing apprehension among buyers as to the prices being paid all played their part in cooling the market.

“At the same time, a housing shortage when the population is growing creates demand.

“New listings in December, at 571, were low, but for calendar 2017 the average number of listings each month was 1510, the third highest on record.

“At the end of the year we had 4160 listings on our books, a quarter higher than at the same time last year, while across the year average available listings on a monthly basis, at 4229, have been at their highest for 5 years.

“The growing value of Auckland’s housing stock is reflected in the changing percentages between property selling for under $500,000 and those for in excess of $1 million.”

Sales under $500,000 fell from 14.9% in 2015 to 11.1% in 2016 and to 8.9% in 2017.

$1 million-plus sales rose from 29.1% in 2015 to 35.4% in 2015 and to 37% in 2017.

Mr Thompson said sales of lifestyle & rural property in Auckland & Northland followed the same pattern in 2017 as for Auckland residential sales, falling compared to the previous 2 years but still at firm prices for good quality properties.

“Dairy farm sales in the north also had to contend with a downturn in the dairy economy, which affected activity.

“Lifestyle living retained its attraction for many and inquiries remained strong throughout the year.”

The figures:

Attribution: Agency release.

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Barfoot sees residential sales lift

Auckland real estate agency Barfoot & Thompson lifted its residential sales in November, but both the average & median prices fell compared to the previous 3 months & November last year.

The 757 sales were up by 123 on October but down from 947 a year ago.

The average sale price of $913,244 was up $2700 from October but down $20,000 compared to a year ago.

The median sale price of $830,000 was $500 short of the October figure and $35,000 down compared to a year ago.

For agency director Kiri Barfoot, the lift in sales was a sign of the market stirring after a 2-month hibernation: “They were small signs, but it indicates the Auckland market is holding firm and buyers are returning. There are certainly no signs of a general market retreat,” she said yesterday.

“At 757 sales in the month, we had the highest number of monthly sales since August, and November’s sales were 9.7% higher than the average sales number for the previous 3 months.

“Both the average price at $913,244, and the median price at $830,000 were right in line with what we have been achieving over the previous 3 months.

“While those numbers are down on their equivalents in November last year, that was a time when the market was close to reaching its peak. This November’s trading is a sure sign that at current values buyers are returning to the market.

“New listings are continuing to reach the market, and during the month we listed 1955 properties, a third higher than the average over the previous 3 months. It brought the number of properties at month end to 4838, the highest number we have had in more than 5 years. There are now a quarter more properties on the market than at the same time last year.

“At the high end of the market, buyers are still seeing value in property at current prices, with a significant rebound in the number of properties sold for in excess of $1 million. In the month we sold 55 properties for in excess of $2 million and a further 262 for in excess of $1 million, the highest number of high-end property sales since May.

“Even during the height of activity in 2016, sales of 55 properties for in excess of $2 million would have been regarded as an excellent month.

“A similar pattern of activity was evident in the lifestyle & rural sectors, with sound sales numbers in Mangawhai & Wellsford in the north and in Pukekohe & Papakura to the south. Properties valued in excess of $2 million attracted strong interest.

“We sold 62 rural & lifestyle properties in November, the highest in a month since March, and during the month at a Pukekohe lifestyle property auction 50% of the properties sold on an unconditional basis.

“Interest from local developers & land bankers is returning, but there is still a degree of hesitancy as they await a clearer understanding of future Government policy.”

The figures:

Attribution: Agency release.

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Agency finds new ratable values generally in line with July house sales

Real estate agency Barfoot & Thompson said on Friday data it had compiled showed new Auckland Council valuations were largely in line with the expected price brackets when compared to actual July property sales.

Managing director Peter Thompson said the agency compared the prices for properties it sold in July to the new ratable value for the same properties, dated 1 July, and found most sold within 10%.

Mr Thompson said the agency’s data showed nearly 80% of the 669 properties reviewed sold for a price within 10% of the new ratable value, and 54% were within 5%. 53 (8%) had a July sale price that matched their new ratable value.

Mr Thompson said a 10% discrepancy, while representing tens of thousands of dollars’ difference for many homes, could be expected when comparing actual values to the findings of a mass valuation exercise such as those used by councils: “These appraisals are for determining the share of rates a property owner pays, so won’t take into account the real value-adds or detractors of an individual property.”

Earlier story:
17 November 2017: Council valuation shows outer suburbs hit harder this time

Attribution: Agency release.

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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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