Peter Thompson rubbishes talk of Auckland's average price heading over $1 million says buyers now have more choice

The median price of homes sold by Barfoot & Thompson was $850,000 in August, a new record high and up $10,000 compared to July and up $95,000 compared to August last year.

The average prices of home sold by the agency was $906,560 compared to $867,681 in July and $821,079 in August last year (see chart below).

However Barfoot & Thompson Managing Director Peter Thompson said the rate at which prices were increasing was continuing to slow.

“August’s price increase was restrained, for both the average and the median price,” he said.

August’s average price was up just 2.6% compared to the average over the previous three months, he said.

“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 five months buyers have not been prepared to pay more than 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 just 1.2% on July and up 2.5% for the previous three 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’s end and new listings, with the average for these statistics for the previous three 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.”

Thompson said the agency had a total of 3151 of homes listed for sale at the end of August which was the highest it had been for five months and up 6.6% compared to the end of August last year.

“The real test of where prices are heading will come this month with the arrival of spring,” he said.

In an ASB Quickview newsletter on Barfoot’s results, ASB economist Kim Mundy said it appeared some people could be rushing to list their homes for sale ahead of new LVR restrictions which are due to implemented next month.

“While sales activity held up in August, it was far from a strong month and may be the result of banks already acting in the spirit of the new restrictions, therefore limiting investor activity in the market,” she said.

Mundy said the number of homes available for sale in Auckland was up, a trend that was also being reflected in data form other organisations.

“However total inventory levels remain near record lows and the market still has a long way to go before demand and supply are back in line,” she said.