Auckland house prices hit new record in December amid tight supply

Tuesday 6th January 2015

Auckland's average house sale price rose to a new record in December as sales volumes for the month surged to a 12-year high amid tight supply, according to the city's largest real estate agency.

House sales climbed 28.5 percent to 1,050 in December from the year earlier month, their highest level for the typically shorter December trading month since 2002, according to Auckland real estate agency Barfoot & Thompson.

The housing market in New Zealand's largest city has been gathering steam following a soft patch around last year's September general election. December's average price increased 8.4 percent to a record $758,891 from the year earlier month while the number of properties on Barfoot & Thompson's books at the end of the month declined 16 percent to a decade low of 2,500, the agency said.

"It was our busiest December in the last 10 years with demand never being higher, or choice lower,” Barfoot & Thompson managing director Peter Thompson said in a statement. “Even though December was the shortest selling month of the year we sold 1,050 properties, our fourth busiest month of the year."

The agency had less than two months' stock on its books at the end of December, indicating that in the first quarter of this year, buyer choice will remain "severely limited", Thompson said.

In the 2014 year, more houses had sold in higher price ranges while activity fell in the lower priced segments of the market, following the Reserve Bank introduction of loan-to-value ratio limits from October 2013, limiting high debt mortgage borrowing. The Reserve Bank hiked interest rates at four consecutive meetings last year, pushing the benchmark interest rate up 1 percentage point to 3.5 percent.

Over the year, 29.5 percent of all homes sold for less than $500,000, down from 38.6 percent of all sales in 2013, the real estate agency said. Meantime, some 17.2 percent of 2014 sales were above $1 million, up from 12.4 percent in 2013.

December's median price rose 14 percent to $720,000 from the year earlier month, marking its first move above $700,000, Barfoot & Thompson said.

BusinessDesk.co.nz

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