Auckland house price growth moderates in October as new rules introduced

Wednesday 4th November 2015

Auckland house price growth moderated in October amid signs the bubbling property market in New Zealand's largest city may be cooling as new restrictions are introduced, according to the city's largest realtor.

The average sale price edged up 0.5 percent to $840,402 in October, lagging behind September's 1.9 percent gain, Barfoot & Thompson said in a statement.

That's 14.1 percent above the average in October 2014, although the lift in the last three months was only 1.5 percent.

Monthly sales volumes fell 21 percent to 1,068, compared with a 3.3 percent gain in September.

Both the government and the Reserve Bank have 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. In a bid to take the heat out of the market, the central bank this month introduced Auckland specific lending restrictions, while the government's own moves to crack down on property speculators and offshore investors have been in place since last month.

"Since the Reserve Bank announced an equity ratio increase for investors and the government new rules for non-resident buyers, market trends have definitely changed," said Peter Thompson, managing director of Barfoot & Thompson. "Sales numbers are definitely down but it is too early to say whether the changes will have a permanent influence on prices. At present, the market is balanced and sales numbers and prices between now and Christmas will determine where prices go in the new year."

Fewer properties are being cleared at auction, with an increase in post-auction negotiations, Thompson said.

"Buyers are no longer under the same pressure to meet vendor price expectations, and the properties that are selling are those with realistic reserves," he said.

The realtor's new listings in October slipped 6.2 percent to 1,820 compared with September, which was a 12 year high for a September month. At the end of October, Barfoot had 3,264 properties on its books, 3.7 percent ahead of the previous month and marking the highest level since March.

BusinessDesk.co.nz

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