Auckland house sales hit 20-month high

By Paul McBeth

Friday 3rd April 2009

Auckland property sales reached a 20-month high as the decline in prices helped revive confidence, according to Barfoot & Thompson.

Auckland�s biggest real estate agency sold 924 houses in March, up 65.3% from February, it said in a statement. The average house price fell 5.8% to NZ$491,780 from the same month a year earlier, and 4% from February.

�We sold close to 300 homes more in March than in any month in the whole of 2008,� said Peter Thompson, the firm�s managing director. �Sellers are accepting that a price that is on average only 6% below values being achieved 12 months ago is realistic.�

Reserve Bank Governor Alan Bollard has slashed the official cash rate to 3% from 8.25% since July, driving down shorter-term and floating mortgage rates. He tried jawboning long-term wholesale rates lower �projecting interest rates to remain at relatively low levels for an extended period.� The median five-year mortgage rate of the four major banks climbed to 6.69% from a 6.5% trough in February, according to the GoodReturns.co.nz website.

�We are encouraged by signs that lower interest rates are beginning to have some impact on the economy,� said Shamubeel Eaqub, economist at Goldman Sachs JBWere. �However, we are wary of calling a bottom too early, given the very large challenges still facing the economy, both domestically and globally.�

Government data showed building consents for new homes rose 12%, seasonally adjusted, in February, the first gain in three months, as short-term mortgage rates encouraged investors to return to the property market, while the value of non-residential building approvals climbed about 6%.

Barfoot recorded its best attendance numbers at auctions in 12 months, selling 65% to 70% of all homes it put on the market.

Comments from our readers

No comments yet