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Auckland Property Market Bruised But Stable Real Effect Not Likely To Be Seen For A Month

The Auckland property market’s first month of trading under the Covid-19 lockdown left it bruised but with its underlying stability intact.

The sales data for April released by Barfoot & Thompson’s Managing Director, Peter Thompson, came with the cautionary note that the real effect of the lockdown would not show up until May’s trading statistics.

“Not surprisingly, it was the sales numbers for the month where the biggest decline was felt, and at 552 sales these were half those for March,” said Peter Thompson.

“However, those properties sold at prices not far below those in March, which were at their highest levels for more than two years, and for higher prices than they were 12 months previously.

“The average price at $962,136, was down 3.2 percent on that for March, but still well in excess of the average prices for February and January, and 3.6 percent higher than the average price in April last year.

“The median price at $900,000 was down 2.7 percent on that for March, but again well in excess of the median prices for February and January, and 8.4 percent higher than in April last year.

“While some of these sales were made in April under the lockdown regulations, many were sales completed in April but agreed in March, and therefore do not give a complete picture of the state of the market.

“The tail of properties working their way through the sales system is now modest, and it will not be till May’s trading results are available in early June that a true indication of where benchmark prices are at post Covid-19.

“What April’s data does underline is that before Covid-19 the Auckland property market was experiencing a solid upturn in sales and prices, and that upturn has been stopped in its tracks with a drastic fall in sales and a modest reduction in prices.

“In a normal month, the level of downturn in April prices might be passed over as no more than a monthly variation.

“In the few days of trading possible in April under Level 3 there was a positive level of activity in new listings, viewings and sales.

“In April we listed 239 properties for sale, less than a quarter of the number we would anticipate listing at this time of the year.

“The low number is also a positive sign for market stability as it does not suggest there is a large number of people who are looking to exit the housing market quickly.

“Vendors appear to be taking a cautious wait-and-see approach, which is the same trend that occurred in past economic downturns.

“A standout feature of April’s sales was that 40 percent of all sales were for properties in the under $500,000 price category while property that sold for $1 million and above accounted for a quarter of sales. Normally, they account for a third of sales.

“This change in sales mix will have had some influence in reducing the average and median sales values for the month.

“At month end we had 3849 properties on our books. This is a higher number than the average for the previous three months but down 17.8 percent on the number at the end of April last year.

“The Level 4 lockdown significantly affected the rural and lifestyle markets with sales numbers for the month only a quarter of what would be expected for this time of the year.

“Interest in far north dairy farms remained steady while lifestyle blocks, particularly those to the north of the Auckland urban area such as Waimauku, Woodhill and the Ararimu Valley, retained the interest of buyers.”

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