Sharechat Logo

Auckland house sales slip, median price rises in last month before LVR, Barfoot says

Thursday 3rd October 2013

Text too small?

Auckland house sales fell in September, the last month before the Reserve Bank's restrictions on high loan-to-value home loans kicked in, while the median price climbed, according to realtor Barfoot & Thompson.

Sales fell 7.9 percent to 1,105 in September from August and were up 14 percent from September 2012, the firm said in a statement. The median house price rose 6.9 percent to $600,000, an all-time high, while the average price edged up 1.6 percent to $657,912.

Barfoot's new listings fell 4.3 percent from August to 1,636 and were up about 29 percent from a year earlier. The firm had 3,191 listings on its books at the end of September, the highest since April.

From Oct. 1, the Reserve Bank has required banks to restrict mortgage lending to borrowers with less than a 20 percent deposit to no more than 10 percent of their total lending. The central bank has been forced to defend the policy in the face of criticism from opposition politicians, banks and builders that it will hurt first home buyers, limit supply of new housing and fail to significantly stem house price rises.

"It remains to be seen just how much of an impact the RBNZ's new 'speed limits' on high-LVR lending will have on mortgage approvals and housing demand," said Daniel Smith, economist at ASB. "While there will be some impact on demand, the fundamentals of the Auckland housing market are unlikely to turn around quickly."

"With Auckland's supply constraints likely to persist for several years, we expect house prices to continue increasing," Smith said. "However, the rate of increase is expected to slow; we anticipate the annual rate of growth will peak in Q4 2013/Q1 2014. The recent lift in listings will contribute to that process, as will the RBNZ's new restrictions."

A shortage of houses in Auckland, the nation's biggest city, has spurred the government to introduce legislation that would fast-track developments and create special housing areas.

Barfoot managing director Peter Thompson said it could be three to six months before the impact of the central bank's new LVR policy can be assessed.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports