Barfoot data reveals impact of housing reforms on prices and sales numbers

by Roxanne Libatique04 Jun 2021

The industry continues to assess the impacts of the new housing package on the market months after housing reforms were announced in March. Now, Barfoot & Thompson (Barfoot) has revealed how the restrictions imposed have impacted prices and sales numbers.

According to Barfoot’s latest data, Auckland housing sales in May showed no hint that the new rules have had an impact.

“Trading in May was excellent, with the median price increasing, the average price being in line with the record price set in April, and sales numbers being their highest in the month of May for four years,” said Barfoot managing director Peter Thompson.

“The market has worked through the implications of the recent changes and continues to trade with confidence.”

The $1,073,000 median price in May was up 2.2% on that for April, setting a new record median price. It was also 17.4% ahead of last year’s May price.

“The average price for May at $1,114,011 was right in line with that for April, and 17.5% ahead of where it was 12 months ago,” Thompson said.

Sales at 1,197 for the month were 8.1% ahead of those for April and higher than in the pre-COVID-19 sales numbers for the same month between 2017 and 2019.

Thompson stated that it is common for sales activity to ease back as New Zealand enters the colder autumn and winter months.

“If this were to occur, the cause is likely to be seasonal rather than investors reacting to the removal of interest payments as a tax deduction and the extension of the bright-line test,” he added.

Although 1,502 new listings last month was the highest in a May for four years, they did nothing to improve availability, according to Barfoot.

At the end of May, Barfoot had only 3,122 properties on its books – the lowest number of properties for sale since January, and the lowest in the month of May for five years.

Thompson said: “110 properties sold for in excess of $2 million in May, the third consecutive month when sales exceeding $2 million, have been above 100. Sales of property for less than $750,000, at 179, represented 15% of all sales.”

Rural and lifestyle property sales also remained unaffected by the new housing reforms last month, with sales in the sector hitting $95 million, the highest May sales turnover for five years.

“Sales around Kumeu were particularly strong following a lift in new listings while buyer demand for property in the $2 million to $3 million price range in Rodney was greater than available listings,” Thompson said.

“The Far North continues to attract high interest, particularly for 10 to 25 ha bush blocks with streams.”

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