Auckland's housing market has come out of Alert Level 4 “bruised but stable”, says the head of the city's biggest real estate agency.
However, as Barfoot & Thompson released its sales figures for the month of April, managing director Peter Thompson warned that the full impact of the nationwide lockdown won't be ascertained until at least another month.
The Barfoot and Thompson figures covered the Level 4 lockdown period, and just two days of Level 3, when buyers were able to once more view properties in person and inspections by building and valuation professionals were once more permitted.
Thompson says sales were down 17 percent down on April last year, and down 50 percent on March 2020. A total of 552 sales were completed by Barfoot and Thompson in April but most of these were holdover sales from March.
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“While some of these sales were made in April under the lockdown regulations, many were sales agreed in March but completed in April, and therefore do not give a complete picture of the state of the market," he says.
“We’re very pleased with the sales to date, but May will have a major impact for the industry,” Thompson says, adding that smaller numbers of buyers able to see properties will slow sales efforts.
He adds that the tail of properties working their way through the sales system from March is now modest, but says that before the Covid-19 crisis escalated, the Auckland property market was experiencing a solid upturn in sales and prices.
“That upturn has been stopped in its tracks with a drastic fall in sales and a modest reduction in prices.”
The drop in new listings for April to less than a quarter of the number usually expected for the period is a positive, Thompson says, explaining that a flood of new properties brought to market would be a sign of panic and that people were selling under pressure.
“The low number is a positive sign for market stability,” he says.
“You will get the odd investor who will take the risk, which is a good opportunity for first home buyers. Or there might be people who bought unconditionally just prior to lockdown and lost their jobs, so will need a quick sale to get out of the situation.
“There is a lot of uncertainty still there, it will take some time.”
In the first few days of trading under Level 3, Barfoot and Thompson saw positive levels of buyer activity.
“[However], vendors appear to be taking a cautious wait-and-see approach, which is the same trend that occurred in past economic downturns," Thompson says.
Thompson points out that the April data shows the tail of a solid upturn in sales and prices in Auckland property.
“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.”
Forty percent of all sales in April were for properties in the sub-$500,000 price bracket, while the number of $1 million-plus sales dropped from one third to only a quarter of sales.
“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," Thompson says.
Lifestyle blocks, particularly those around Auckland such as Waimauku, Woodhill and the Ararimu Valley, retained the interest of buyers, Thompson said.
“There are still many people who are cautious about the virus and who are waiting until Level 2 before they put their house on the market or go looking. There will be a lot more confidence at Level 2.”
