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Auckland housing market out of hibernation, Barfoot & Thompson says

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  • Auckland housing market out of hibernation, Barfoot & Thompson says

    From Interest.co.nz

    April 3rd, 2009
    Auckland’s largest real estate agency group, Barfoot and Thompson, has reported sales volumes jumped in March to a 20 month high as buyers “returned with a vengeance” and sellers accepted a slight fall in prices to clear the market.

    “Certainly in March, the Auckland housing market emerged from its hibernation,” Barfoot and Thompson Managing Director Peter Thompson said in a statement titled ‘Buyers return to Auckland housing market with vengeance.’

    Barfoot’s average sale price in March was NZ$491,780, down 5.8% from March 2008 and down 4.1% from February. It reported 924 sales, up 65.3% from February and up 46.2% from a year ago. The March average was down 8.7% 12.8% from Barfoot’s peak average of NZ$538,478 in December 2007 NZ$564,162 in March 2007.

    “We sold close to 300 homes more in March than in any month in the whole of 2008,” Thompson said.

    Thompson said factors affecting March’s sales activity were the traditional March spike, further falls in the Reserve Bank OCR, bank mortgage rates reaching new lows and knowledge that tax cuts were about to kick in.

    “A recovery of this order is greater than any expectation, and it may well contain an element of released intention,” Thompson said.

    “Buyers may be sensing that market prices are close to the bottom of the cycle and have made the decision to act,” he said.

    “At the same time sellers are accepting that a price that is on average only 6 percent below values being achieved 12 months ago is realistic in the current market, and are ready to accept.”

    “It means that the market is active, and the housing market is edging further back to normality.”

    “Another indicator of returning confidence is the level of interest shown at auctions. In March we saw our best attendance numbers for 12 months, and we sold some 65 to 70 percent of all the homes that we put to the market.”

    “In February, we reported prices firmed on modest turnover, while this month turnover was extremely strong with prices coming off marginally.”

    Here are all our Real Estate sector charts, including REINZ medians, Rents, Mortgagee listings, Housing confidence and others.

    Source: http://www.interest.co.nz/ratesblog/...thompson-says/

    Cheers

    Marc
    Free business resources - www.BusinessBlogsHub.com

  • #2
    Ambiguity:

    "Barfoot's average sale price in March was NZ$491,780, down 5.8% from March 2008 and down 4.1% from February."

    Can anyone else see the ambiguity in this press release? Is it February 2008 or February 2009? If it's February 2009, then shouldn't the headline be: "Prices plummet by 4.1% in two months"?

    What was Barfoot's average sale price for February 2009?

    Comment


    • #3
      Yeah, wait till winter, different story then.
      Squadly dinky do!

      Comment


      • #4
        Also, last March, everyone was saying that there was nothing wrong with the housing market. I find it quite amusing how the past is ignored or rewritten and the present is heralded as “happy days.”

        With only a 3% drop in house price and an approximate 52% to 76% difference between the actual median income and the median income required to buy the median priced home – I guess Barfoot will be really surprised by this time 2010.
        Erewhon is still erehwon, I don’t see it changing anytime soon.

        http://exnzpat.blogspot.com/

        Comment


        • #5
          I think buyers will retreat again as those fixed rates get higher, along with unemployment levels.

          It would be nice to think the party has begun again, but alas, it was just the last few drunks heading out the door.

          Comment


          • #6
            Originally posted by Cadmium View Post
            I think buyers will retreat again as those fixed rates get higher, along with unemployment levels.

            It would be nice to think the party has begun again, but alas, it was just the last few drunks heading out the door.

            Nicely said Cadmium.

            I find that much of my back-and-forth repartee with some of the folks on this website to be much the same as trying talking sense to an alcoholic. An alcoholic cannot nor will not seek treatment for their disease until they admit that they have a problem in the first place!

            Erewhon is still erehwon, I don’t see it changing anytime soon.

            http://exnzpat.blogspot.com/

            Comment


            • #7
              An alcoholic cannot nor will not seek treatment
              Just like smokers.
              "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

              Comment


              • #8
                And supposed kiwis living in the US who have a anti NZ chip on thier shoulder?

                Comment


                • #9
                  The housing market in Auckland, in mid price range, Northshore homes is not that bad. Prices in the mid range have fallen a bit, but if this is the worst of it, if it doesn't go down alot more, which I believe it won't, whats the big problem exnzpat? Whats wrong with a flat market for 2 to 3 years? Its business as usuall, rents to collect, houses to buy, shops to lease out............

                  Comment


                  • #10
                    Kiwi household debt survivable

                    By NICK SMITH - The Independent Last updated 05:00 03/04/2009
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                    SURVIVABLE: Mortgagee sales may be hitting new highs, but the Reserve Bank says its analysis of household debt is reassuringly positive.
                    Relevant offers





                    Mortgagee sales may be hitting new highs, but the Reserve Bank says its analysis of household debt is reassuringly positive and it expects households to withstand even a big shock.
                    ''Most debt is held by high-income households,'' said Reserve Bank adviser Mizuho Kida. The top two income bands account for more than 70 per cent of all household debt.
                    ''Loan-to-value ratios on housing debt are generally quite manageable and debt-service ratios have actually fallen among lower income households,'' Kida said. Households on the lowest incomes hold only 1 per cent of debt, down from 3 per cent in 2001.
                    This reflected the common observation that home ownership had become more expensive, she said.
                    Only 35 per cent of households hold a mortgage, and of these, more than 40 per cent are less than $200,000. Four per cent of households service a mortgage bigger than $400,000. ''For most, the debt remains manageable.''
                    But Kida warned that weaker economic growth and falling house prices would require adjustments that, for some, would be painful.
                    Mortgagee sales have soared in recent months, albeit from a tiny base. In January, 150 owners were forced to sell their homes, a more than five-fold increase on the 28 two years earlier.
                    Foreclosures hit a 14-year high in December, with 191 mortgagee sales compared with 66 in December 2007, a 270 per cent increase.
                    But the New Zealand mortgage sector is substantially different from that the United States, where the housing sector has alarmingly collapsed, Kida said in a paper, Financial vulnerability of mortgage-indebted households.
                    The subprime segment (lending to people with poor credit history and scanty income) was relatively absent in New Zealand, domestic assessment of risk was good and the banks had not invested heavily in the securitisation of mortgages, as had their US equivalents.
                    Kida used the triennial household economic surveys from 2001 to 2007 to assess the vulnerability of mortgage-holders to falling prices, rising unemployment and slowing economic growth. Loan-to-value ratios, a good indicator of mortgage stress, had actually fallen on average since 2001, she noted. The other key indicator was the debt-service ratio, comparing annual mortgage payments to disposable income. The proportion of households with a debt service ratio more than 50 per cent was highest among low-income earners. But even if the shocks were big, it would not result in wholesale foreclosures.

                    Comment


                    • #11
                      So… if you are already poor then it follows that you have nothing to lose. OK, I buy it.
                      Erewhon is still erehwon, I don’t see it changing anytime soon.

                      http://exnzpat.blogspot.com/

                      Comment


                      • #12
                        Originally posted by exnzpat View Post
                        So… if you are already poor then it follows that you have nothing to lose. OK, I buy it.

                        Except that is nothing like what the article says.

                        Comment


                        • #13
                          Originally posted by Bob Da Builder View Post
                          The housing market in Auckland, in mid price range, Northshore homes is not that bad. Prices in the mid range have fallen a bit, but if this is the worst of it, if it doesn't go down alot more, which I believe it won't, whats the big problem exnzpat? Whats wrong with a flat market for 2 to 3 years? Its business as usuall, rents to collect, houses to buy, shops to lease out............

                          Bob,

                          I wish it were true. But, there is no good mathematical argument for a flat market. In fact, it is impossible.

                          This is not about the housing market anymore – we’ve moved beyond that now.
                          Erewhon is still erehwon, I don’t see it changing anytime soon.

                          http://exnzpat.blogspot.com/

                          Comment


                          • #14
                            Originally posted by Baron Silas Greenback View Post
                            Except that is nothing like what the article says.

                            Yeah, you may be right. I read it a couple of more times. It really doesn’t say anything does it? Just another poorly written article generated by the hack-house New Zealand media – very droll.
                            Erewhon is still erehwon, I don’t see it changing anytime soon.

                            http://exnzpat.blogspot.com/

                            Comment


                            • #15
                              I hear it around a fair bit that NZers will stand in fair stead the next few years in comparison with national debt saddled and pension-lost Ukers, Nth Americans, Europeans and Chinese.
                              I've heard stuff like, "That's harder than immigrating to NZ." And, "[We're] putting our bets in safe currencies like the NZ dollar."

                              So, while a tennis racquet will swipe the average Kiwi across the bum, in other places some are facing semi-trailers barreling down on their personal economy.

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