Auckland house sales climb to 15-year high for month of August, prices stall

Thursday 3rd September 2015

Auckland house sales jumped in August as a flood of new listings drove an unseasonably high level of activity, trimming average sale prices in the month, according to Barfoot & Thompson.

The city's biggest realtor sold 1,314 houses last month, the most for an August month in 15 years, and 45 percent higher than a year earlier, when turnover dwindled in the lead-up to the 2014 general election. Barfoot had 2,123 new listings in the month, 88 percent more than a year earlier, and the highest monthly number in more than 10 years. Still, the realtor only had 2,957 houses on its books at the end of the month, 5.5 percent more than a month earlier, and 8.3 percent below August 2014, on the heightened turnover.

"August can be a slow month for sales, but this year it was the third busiest sales month for 16 months," managing director Peter Thompson said.

Auckland's housing market has been a persistent headache for policymakers who are trying to make up for a lack of building work following the collapse of the mezzanine finance sector last decade, which funded a lot of residential development, in the face of record inbound net migration and low interest rates. That's been pushing up prices to levels the Reserve Bank sees as straining the country's financial system, and governor Graeme Wheeler will impose more lending restrictions on residential mortgages in the country's biggest city later this year.

Barfoot figures show the average house sale price slipped 0.8 percent to $827,359 in August, though were still 15 percent higher than a year earlier. The median price slipped 0.3 percent to $757,000 for a 20 percent annual gain.

Thompson said winter typically contributes to the decline in prices, and as spring stokes activity, low mortgage rates, a growing population, and the supply shortage will continue to push up prices.

"The most likely scenario is that prices will increase modestly in coming months from where they are at present," he said.

Quotable Value data this week showed national property values rose at their fastest annual pace in eight years in August, underpinned by Auckland's property market, where demand was spilling outside the country's biggest city into other parts of the upper North Island.

BusinessDesk.co.nz

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