Barfoot & Thompson monthly sales lowest since 2010

Thursday, 5 January 2023

Property investor's warning to homeowners wanting to sell.

Auckland’s largest real estate agency says its average monthly sales in 2022 were the lowest since 2010.

Next year was unlikely to bring improved fortune for Barfoot & Thompson, with managing director Peter Thompson saying sellers were increasingly holding off listing their properties.

“What we are really seeing at the moment is people are holding off, and waiting until the market self-corrects,” he said.

Barfoot & Thompson completed 527 sales in December, the lowest in any December for the last five years, and roughly 25% fewer than the month before.

**READ MORE:

Peter Thompson said people were reacting as they did when the stock market crashed in 1987, and taking their properties off the market until the self-correction was over.

* Auckland's median house price fell 3.3% in April alone

* Buyer-seller standoff leads to 'lowest home sales since GFC fallout' - CoreLogic

* Reality check coming on house prices, Corelogic warns

Thompson said 2022 was likely the second-slowest sales period the agency had experienced, with the slowest being 1987, when the stock market crashed.

Median prices in December were down 16% from their peak.

Auction clearance rates fell significantly at Barfoot & Thompson this year, as reserve prices were continuously set above what buyers were willing to pay.

Failures to make sales had also resulted in a glut of properties sitting on the market. The agency had 4664 properties on the books at the end of December – 28% more than in December 2021.

The glut was despite new listings in December being down by over 55% on the month before.

Thompson said December was traditionally the slowest month for new listings, partly because realtors usually only worked three weeks of the month, but sellers were holding back.

“A lot of people are still undecided because of interest rates, inflation… whether to put them on prior to Christmas or not,” he said.

Despite the low sales and buyers having lots of properties to pick from, Thompson took solace in a temporary-stalling in price falls.

“Contrary to the expectations of economists and commentators, the median price paid for property in December has barely moved from where it was in September,” Thompson said.

Property data firm CoreLogic also recorded a slowing in the rate of house price falls in December, although its economists labelled the phenomenon a “false dawn”.

CoreLogic chief property economist Kelvin Davidson said the Reserve Bank was likely to increase the official cash rate (OCR) another 0.75% in February, which would likely trigger another increase in home loan interest rates, which would add impetus to the downturn.

Thompson agreed there were many continuing headwinds for the housing market, and said price falls were being arrested largely by sellers’ refusal to accept lower prices.

“While all the drivers putting pressure on prices such as rising interest rates and inflation, concerns over future economic activity and more properties for sale than there have been for a decade remain, vendors have become cautious about accepting what they consider to be too low an offer.

“In December the effect of this reluctance was particularly felt in the under $750,000 price category, and we sold only 90 homes in this price segment,” he said.

In previous years, Thompson said a similar period might see 200 to 300 properties in this price range selling, although he said the reduction may in part be due to prices having generally gone up, reducing the amount of stock that fell into this price range.

“At the same time, we sold 37 homes for more than $2 million, 12 of them for more than $3m.”

During 2022 Barfoot and Thompson sold 37% fewer homes compared to the year before, with each month averaging 706 - the company’s lowest since 2010.

The rural and lifestyle market also experienced quiet trading in December with sales of $33m.

“In Northland buyer interest continued to be shown in beef breeding and finishing units with larger units being sought for forestry, which remains a big player in bare land sales.”