Auckland house prices are stabilising, may have plateaued, Barfoot says

Wednesday 3rd August 2016

Auckland house prices may have plateaued in July after hitting a record in November last year, the city's largest realtor says.

The average sale price fell 4.5 percent to $867,681 in July from June, Barfoot & Thompson said in a statement. That's 2 percent lower than the average for the previous three months, but still up 4.9 percent on July 2015. The average price hit a record $876,075 in November 2015. Monthly sales volumes fell 12 percent to 1,168 from June and were down 26 percent on July last year.

“The year-on-year increase in prices is still occurring, but at a much slower rate than we have seen in the past 4 years," chief executive Wendy Alexander said. “The winter months, school holidays and a slowing in the number of new listings all contributed to the slow-down in July, but buyer determination to pay whatever is necessary to achieve a property was tempered."

The government and the Reserve Bank have both introduced new measures in an attempt to cool Auckland's housing market, where migrants and investors are adding to competition for a shortage of housing stock.

Last month the central bank indicated it would extend mortgage lending restrictions on Auckland property investors to the rest of the country, requiring a bigger deposit and reintroducing a uniform national cap on highly leveraged owner-occupier mortgages. By July 21, all five of the country's leading retail banks had acted early to introduce restrictions on lending to property investors as part of the Reserve Bank's bid to slow the heated housing market.

“Whether price increases will continue in the remaining months of the year is unclear," Alexander said. "Normally, prices rise as we enter the spring/summer months, but the Reserve Bank’s new regulations affecting investors will start to have an impact from August on.”

The latest Barfoot data shows 37 percent of all the properties the realtor sold in July went for more than $1 million, with just 9.1 percent selling for less than $500,000.

The realtor's new listings in July fell 19 percent to 1,426 from June and were down 20 percent from a year earlier. At the end of July, Barfoot had 3,012 properties on its books, 2.6 percent more than June and up 7.5 percent from July last year.

BusinessDesk.co.nz

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