February a lean month for real estate agents, new data shows

Wednesday, 13 March 2019

Auckland house sales were down almost 20 per cent compared to the year before.

House buyers and sellers are sitting on their hands, new data shows.

Real Estate Institute figures reveal that the number of residential properties sold in Auckland in February was down 17.9 per cent compared to the year before. The 1358 sold in the city in the month was the lowest number for any non-January month since October 2010.

With 6387 salespeople holding active licenses in Auckland, there were more than four agents for every sale.

Economist Cameron Bagrie, of Bagrie Economics, said the turnover drop showed a disconnect between what sellers wanted and what buyers were prepared to pay.

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Northland also had an activity slump, with the 169 sales across 531 salespeople in February, down 27.2 per cent on a year earlier.

Nelson's turnover fell 20 per cent to 96 sales for the 392 salespeople in the Nelson and Marlborough region.

Excluding Auckland, sales in the rest of the country were down 6.6 per cent year-on-year.

Brad Olsen, economist at Infometrics, said affordability and Government policy were spooking the housing market.

Real Estate Institute chief executive Bindi Norwell said it was becoming tougher to be a real estate agent, and not just because of dropping sales numbers.

She said new rules, such as anti-money laundering requirements, were adding to their workload.

The number of registered salespeople was holding steady year-on-year.

Norwell said February was normally a busy time of year but sales numbers dropped in 13 out of 16 regions.

'Traditionally children go back to school and people return from their holidays and housing activity picks up, however, February 2019 has been an exception to this rule,' she said.

'The lower level of sales volumes compared to the same time last year can be attributed to a number of things – the raft of legislative changes impacting the housing market at the moment, the increasing difficulty in accessing finance and vendors' pricing expectations.

'What we're hearing from salespeople around the country is that vendors and investors are taking a 'wait and see' approach to the housing market – much like you would normally see around election time. This is particularly true in relation to the recently announced capital gains tax proposals from the Tax Working Group.'

Bindi Norwell says people's perceptions about value for money are driving them further into the country.

Real estate agent Alistair Helm said it would logically seem to be a tough time to be in the industry but a difficult market could help smart salespeople.

'Those that best understand the details of the current market and can handle the vagaries of this market and have the skills to bring together buyers and sellers and negotiate and facilitate well, understand the buyer behaviour and optimise the marketing of the property both online and in print.

'These smarter agents relish this challenge and for them this is a golden opportunity and they sell more than this time last year - after all there were still 1358 property sales in Auckland last month and 5954 sales around the country, that's 212 property sales per day.'

Brad Olsen, economist at Infometrics, said affordability and Government policy were spooking the housing market.

'Investors are shying away from the market, with concerns about the profitability of investment arising from a potential capital gains tax, the ringfencing of rental losses, and tougher standards for rental property.

'Auckland prices remain unaffordable for many potential buyers, who simply cannot find the additional funds to finance a purchase, leading sellers to lower their prices to entice buyers. Elsewhere in New Zealand, prices continue to grow even as supply starts to catch up with demand.'

Median house prices across New Zealand increased by 5.7 per cent in February to $560,000, up from $530,000 in February 2018.

Median prices for New Zealand excluding Auckland hit a record $490,000, up 8.9 per cent from $450,000 in February last year

Median house prices in Auckland returned to the $850,000 mark – down 0.6 per cent on last year's figure of $855,000, but up 5.6 per cent on January's median price of $805,000.

Auckland's median price fall was the result of a slight fall in the number of million dollar-plus properties sold.

Bagrie said the Auckland price data was probably masking weakness as quality houses continued to sell and others stagnated.

In February the median number of days to sell a property increased by three days from 44 to 47 when compared to February last year. He said the days-to-sell measure was a precursor for prices.