‘Strong sense’ of Auckland house price peak: REINZ

The time it takes to sell a property in Auckland is now at a six-year high, as house sales in the city continue to ease.

According to the Real Estate Institute of New Zealand (REINZ), the median house price in Auckland fell a seasonally adjusted 1.7 per cent last month to $800,000, although it was 11 per cent higher year-on-year.

Sales were down a seasonally adjusted 9 per cent on a year ago, and the number of houses on the market was up by a fifth.

‘‘There is a strong sense now that the Auckland market has peaked,’’ Westpac senior economist Michael Gordon said.

REINZ chief executive Bindi Norwell said Auckland’s market was a mixed picture at present.

Days to sell rose from 41 to 43 days, just below the long-run average.

‘‘We hear anecdotally that LVRS [loan-to-value ratios] are having an effect and banks are reducing lending, becoming more selective about who they lend to, what properties they will lend on and the terms,’’ Norwell said.

‘‘Recent media has noted the lower level of cash incentives being offered by banks, and this ties in with the feedback agents across the country are hearing from their clients.’’

In contrast, there were other parts of the country where stock was extremely tight.

Nationally house prices grew just 0.3 per cent on the previous month, but they were still up 14.1 per cent year on year at $495,000.

Sales were down 8.9 per cent on a year ago, although it was a major improvement from January.

The tightest market in the country was Wellington, where it took just 29 days to sell a property.

Prices there were $520,750, up 15.1 per cent year on year and 13.2 per cent on the previous month.

REINZ’S Wellington regional director, Mark Coffey, said banks were showing a clear preference for owner-occupiers and existing clients, and were tightening up on lending to investors, even if they had the required 40 per cent deposit.

‘‘Anecdotal evidence suggests brokers are struggling to get deals through with the banks,’’ he said.

‘‘As a result the market has been quite volatile over the past few months, with large changes in the median price and sales volumes, with good evidence that there are fewer investors active in the market.’’

Of the 12 regions, Northland and Otago hit new record highs. Northland hit a high of $421,250, up 20.4 per cent for the year, while Otago prices jumped to $317,250, up 17.5 per cent annually.

ASB said Auckland remained subdued, and that the time taken to sell a house was the longest in six years. ‘‘We expect house price growth to be muted over 2017 but strong population growth combined with sluggish housing construction will continue to provide a floor to house prices.’’