Strong property sales but prices lower

Auckland's biggest real estate agency recorded its strongest January in four years but prices were still down on December.

Barfoot & Thompson's data for last month showed 683 sales, down on December's 714, and prices down from December's $573,071 to $529,768.

But managing director Peter Thompson said the month's activity was extremely positive because it was the best January for sales volumes since 2007 and new listings rose 15.1 per cent.

"We sold double the number of million-dollar homes than we did last January," he said.

But an economist said that overall, Auckland has a shortage of houses for sale.

Philip Borkin of Goldman Sachs said the inventory situation remained tight.

"While seasonally adjusted new listings rose 3 per cent from December to January, the number of available listings continues to fall, touching the lowest level since June 2007.

"At the current pace of sales, we estimate that there is only 5.4 months of supply for sale on the Auckland market, again the lowest since mid-2007.

"At that time, strong demand tightened inventory appreciably. At present we see a shortage of available supply and this could have different dynamics with regard to how the housing market impacts the rest of the economy.

"We believe the low level of new listings reflects a general caution from households overall. If it continues, it should cap the upside for turnover as buyers lack choice, although it will continue to provide a floor under prices," Mr Borkin said.

Barfoot listed 846 houses in December and 1031 last month but these numbers were still well down on months such as last February when 1529 houses were listed for sale with the agency, or November's 1562 new listings.

Mr Thompson also expressed concern about the general lack of listings.

"At the end of January we had 4766 properties listed. While 4 per cent higher than the number at the end of December, it was the lowest number we have had at this time of the year for four years.

"Limited choice has been a feature of the market now for the past seven months. From now until late autumn new listings and sales numbers will build before starting to ease with the approach of winter. Buyers and sellers are taking a measured approach and it will result in the market remaining stable and positive," he said.

By Anne Gibson

Published Courtesy of NZ Herald Online

Source: NZ Herald Online

Posted: 7 Feb 2012