Mismatch between Sales Growth and Price Growth
7 October 2003
WEDNESDAY, 8 OCTOBER, 2003
Real Estate Listings Shortage Prompts Mismatch between Sales Growth and Price Growth
The latest figures from leading Auckland real estate firm Barfoot & Thompson show a divergence developing between sales growth and price growth.
The volume of residential property sales recorded by Barfoot & Thompson in September was a new high for the company at 1,324, and up 7.8 percent on September a year ago. However, that rate of increase is the lowest since December 2000 (excluding February to April this year when economic indicators in New Zealand were depressed due to SARS, the Iraq war, the electricity crisis and drought).
Director Peter Thompson says, “This suggests a slowing in the growth of turnover in the Auckland real estate market which is not yet being reflected in prices.”
The average sale price in September was a record $403,000, up 18.5 percent on the same point last year. Over the three months in the September quarter, average house prices are up 19 percent when compared to the same quarter last year.
“Clearly there is a divergence appearing between sales volume growth and price growth which is probably explained by the continuing shortage of listings. Our available listings are down almost 23 percent on last year.”
“Interestingly, we have noticed more new listings in the last couple of weeks which is consistent with the traditional Spring market upturn and may flow through into more settled prices in the coming months.”
“It’s relevant to note that average weekly rental eased this month to $327, which is almost as low as it has been this year. Average weekly rentals with Barfoot and Thompson have ranged from $326 to a high of $340 during 2003.