Worries about negative impacts from March’s changes to property investor regulations may not be founded, according to sales figures from Auckland’s largest real estate agency.
Barfoot & Thompson managing director Peter Thompson reported that May sales volume was bigger than April, with both sales and new listings the highest in four years.
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He says that May was “excellent” as the market was continuing to trade with confidence and had worked through the implications of the Government's changes.
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“Sales at 1197 for the month were 8.1% ahead of those for April and comfortably higher than in the pre-Covid sales numbers for the same month between 2017 and 2019.
“[The market] is not holding vendors back from listing, we’re selling what we’re listing and what we need to sell. There are lots of enquiries from first-home buyers and investors.”
Thompson says that his company’s sales numbers dispel reports of an easing of the FOMO – buyers rushing to buy for fear of missing out.
“We’re seeing very good activity, so I’d counter those arguments. Auction rooms have been alive and active, we’ve a clearance rate of 75% and selling a lot of property after auction with conditional offers.”
Barfoot and Thompson managing director Peter Thompson: "Lots of enquiries from first-home buyers and investors." Photo / Supplied
He adds that while some vendors still want the “ultimate price” at auction, most are prepared to realistically negotiate afterwards. And many first-home buyers step in after auctions with offers that fit their finance conditions.
While Barfoot & Thompson’s auction rooms have been the scene of record-breaking sales of former family homes to developers, Thompson says that this is a relatively new phenomenon in smaller suburban sites.
“We’d been seeing even before the Unitary Plan first came out the big sites at Hobsonville, Westgate, Millwater and north Auckland. Now it’s a different investor going after those brownfields sites. But now they’ve got to go through two years to get through resource consents and construction.
Sold under the hammer for $2.802m: A four-bedroom villa in Epsom. Photo / Supplied
“In those growth areas like New Lynn or Glen Eden or Glendene, based around transport hubs and walking distance to things, new development is making it very attractive.
“That’s not necessarily driving up prices, because we’re getting very realistic prices for first-home buyers [from the new stock].”
On the horizon, Thompson says that buyers now need to be conscious of signals from the Reserve Bank that interest rates will go up, so they need to figure that into their calculations of what they can afford in the future, but that properties with special appeal will always sell well.
Top-end sales are growing for the company: for the third month in a row over 100 sales were for prices over $2 million.
Many of those are to family buyers not being pipped at auctions by developers with deeper pockets. This week an immaculately renovated four-bedroom villa in a double grammar zone sold under the hammer for $2.802m after a pre-auction offer was made just six days on the market.
“Even though this was zoned for terrace houses and apartments, the buyers were all families, this was not for development,” says Barfoot & Thompson agent Cici Wang who marketed the property on King Edward Avenue, in Epsom.
“People may understand in the future they could do something, but with cross-lease and the quality of the renovation, this was huge money, and not for a developer.”
The renovated house with a new gourmet kitchen and plenty of heritage features sat on a cross-lease half share of 1373sqm section with a council valuation of $2.35m.
