In a news release today Peter Thompson, Managing Director of Barfoot & Thompson, made the comment that the average February house sales price was a record $521,323.
“The average house price in February increased by 3.2% on January,” he also said.
For the past two years, the average February price has been between $10,000 and $20,000 below the average for the previous year, however this February’s average price is up 1.7% on February 2009.
In my opinion these types of statements are misleading and obviously come with a lot of “agenda” attached.
In my opinion the market is still weak compared to where it was 2 years ago however the price point has come down on many homes.
In other words imagine this scenario, 2 years ago Magnum releases a new ice cream that costs $8 and lots of people buy it however the bulk of the market buy the $2 magnum range thereby keeping the average price of a magnum down at around $2.50
Now come forward in time and we have just had the recession, now nobody is buying the $8 magnum so the makers of the magnum reduce the price to $3 to sell all of the stock.
Of course the $3 magnum being twice the size of the other magnum and having a perceived value that is $8 sells like hot cakes and none of the $2 magnums are sold.
The average price of a Magnum has now gone up to $3…yay it’s boom times but it it really?
The owners of the $8 magnums had to discount that by more than half and the $2 magnums are not selling at all… thats a pretty bleak picture.
So when you read about record house prices etc …stop and think, it this real or could it just be spin.
Thats my opinion
