Average House Price In December $552,933

January 7, 2010
Media Statement

Average House Price In December $552,933

The Highest Monthly Average In 24 Months

Buyers see value for money, not capital gain

House prices never fell dramatically from 2007 highs as sellers would not accept prices on offer

Auckland house buyers again showed their belief in the stability and future of the region’s housing market, with sales in December averaging $552,933, the highest average monthly price in 24-months.

“You have to go back to the height of the 2007 property boom to see comparable prices,” said Peter Thompson, Managing Director of Barfoot & Thompson.

“Unlike 2007, however, buyers are committing on the basis of value for money and lifestyle decisions, rather than expectations of substantial capital gain.

“Activity was exceptional for a December, and we sold 648 properties, our highest number of sales in a December for two years, and were 40.6 percent higher than in December last year.

“Regardless of how you analyse the sales data, sellers are now achieving almost a similar price for property as they would have at the height of the 2007 property boom.

“Average monthly prices have now increased for the past three months, and the average monthly price for 2009 of $522,297 is 1.7 percent higher than that for 2008 and 3 percent down on that for 2007.

“In reality, the prices of houses did not fall sharply from their 2007 highs because owners did not accept the lower prices on offer.

“What has yet to return to 2007 levels is the average number of monthly house sales, with 2009’s monthly average of 782 being down 14.5 percent on the average number of homes sold monthly in 2007.

“However, they are up 43 percent on the average number of homes sold monthly in 2008.”

Mr Thompson said the sales activity statistic was the real story of what happened to property following the end of the 2007 boom.

“Properties did not change hands as the majority of sellers would not accept the prices on offer.”

Mr Thompson said that he anticipated market prices would remain stable in the first quarter of 2010.

“While interest rates are comparatively low, buyers are conscious that rates are likely to rise in 2010, and given that prices rose each month for the last three months of 2009, rising interest rates are not seen as a deterrent.

“Buyers are balancing that with a quiet confidence in the economy and their job prospects.

“New listings in December at 965 held up well, and were the highest for a December for two years but we entered January with only 5431 properties on our books, our lowest number in a January for two years.

“Taking all these factors into consideration, I anticipate we will follow the traditionally pattern of prices falling away a little in January, and then firming for the remainder of the warmer months.”

While monthly sales values have strengthened, average weekly rents have fallen for the second consecutive months and at $389 in December are 3.5 percent below their peak in October.

The average weekly rent for 2009 was $388, the same as for 2008.

ENDS

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