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According to a recent report by Barfoot & Thompson, Auckland's housing market experienced a significant rebound in May, with house sales soaring from 473 in April to an impressive 723. Managing director Peter Thompson expressed optimism about this positive shift, describing it as a hopeful sign for the market.
According to Thompson, eager buyers returned to the Auckland housing market in May, resulting in the highest number of property sales in a month since May of the previous year. This resurgence comes after a lacklustre April, which witnessed the lowest sales figures for that month in 22 years. However, the May sales volume was not far off from pre-pandemic levels for the same time of the year, indicating a potential recovery in progress.
Despite the surge in sales, the report noted that sale prices remained stagnant. The median sale price for May stood at $1.07 million, slightly lower than April's $1.08 million. Furthermore, the median price witnessed a 15.1% decline compared to the same period last year. Nevertheless, Thompson emphasized the importance of sales volumes rather than prices, underscoring that buyers are not deterred by current mortgage interest rates.
The buoyancy in the market is seen as an encouraging development, aligning with reports from OneRoof, CoreLogic, and ANZ Bank, suggesting a possible stabilization of declining property values. The OneRoof-Valocity House Index revealed a 2.3% decline in New Zealand's average property value in the May quarter, primarily influenced by successive interest rate hikes. Auckland experienced a more significant decrease of 3.2% over the same period. However, CoreLogic data indicated a slowdown in the rate of decline in property values nationwide during May.
ANZ economists have revised their predictions, now expecting a marginal 0.1% increase in annual house prices for the December quarter, a departure from their previous forecast of an increase in the June 2024 quarter.
Thompson acknowledged the decline in median sales prices for May, with a 4% drop compared to April. However, he pointed out that prices had reached a level where more sales were being transacted, supporting recent statements by the Reserve Bank governor regarding the market's sustainability.
Barfoot & Thompson listed a total of 1,262 properties in May, aligning with the three-month average. As sales numbers continue to climb, the available options for buyers are expected to decrease. Notably, the high-end market experienced a resurgence, with 31 homes sold for over $2 million in May, the second-highest monthly sales figure in that price category this year. Additionally, there was strong demand for sales in the affordable price range, with 148 transactions recorded under $750,000.
The surge in May sales offers a glimmer of hope for the Auckland housing market, indicating a potential bottoming out of the current cycle or its proximity. While sale prices remained flat, the increasing number of transactions demonstrates renewed buyer confidence and resilience in the face of current economic challenges.
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