Auckland house price growth stalled in July as properties 'fully priced', Barfoot says

Wednesday 5th August 2015

Auckland house price growth appears to have stalled, even as turnover remains high, as properties are deemed "fully priced", according to Barfoot & Thompson, the city's largest realtor.

The average Auckland sales price in July of $827,359 was little changed from $826,474 in June and $822,148 in May, the realtor said. It is 15 percent ahead of the $719,312 average price from July last year. The company sold 1,388 homes in July, 19 percent ahead of June and 41 percent higher than July last year, marking the most sales for the month since 1999.

"The first signs that price increases were slowing could be seen in last month's sales figures, and this month's results confirm that prices are no longer racing ahead," said managing director Peter Thompson. "The combination of high turnover and stable price points to buyer confidence in the strength of the market at current prices but also recognition that property is fully priced."

Auckland's spiralling property prices, underpinned by a supply imbalance, have been a concern for the Reserve Bank as it monitors risks to the country's financial stability. The central bank cut its benchmark interest rate in June and July to bolster the slowing economy and at the same time has outlined plans to impose lending restrictions on property investors from October, while the government has tasked its tax collection agency to police capital gains more forcefully.

Barfoot & Thompson said its 1,777 new listings in July were 1.6 percent ahead of June and 27 percent ahead of July last year.

The realtor had 2,802 properties on its books at the end of the month, the lowest level since December last year which it said is likely to contribute to choice "remaining tight" this month.

During July, the company made 411 sales of properties worth at least $1 million, the second highest month on record. There was also strong interest in properties under $500,000, which made up 14.4 percent of all sales from 13.6 percent in June, it said.

BusinessDesk.co.nz

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