House prices still on rise but rapid increases ‘reined in’
Auckland house prices continue to rise but at the lowest rate in five years, according to new data from Barfoot & Thompson.
The real estate firm’s managing director, Peter Thompson, said the market had been “reined in” from previous rapid price increases and had settled into a stable trading environment.
Last year, the average selling price in Auckland increased by 4.5 per cent to $926,632 and the median selling price by 2.7 per cent to $843,583.
The number of houses sold, however, fell by more than a quarter compared to each of the previous three years.
“The sense of urgency to buy a property regardless of its asking price has disappeared,” Thompson said.
“It has been replaced by buyers taking a more considered approach.
“Normally when sale numbers fall by such a large percentage, prices retreat from their record high levels. But this has not occurred, and prices have continued to rise modestly. It underlines there is still buyer support at current prices.”
Thompson said this was in part aided by the recent release of new capital values by Auckland Council, which meant both buyers and sellers had the same information on the potential value of a property.
ASB economist Kim Mundy said the combination of regulatory changes and uncertainty around the new Government was also impacting the Auckland housing market.
“While new listings have been volatile, there are no signs of sellers jumping into the market to sell their homes ahead of regulatory changes,” Mundy said. “Indeed, it appears that sellers continue to be cautious by not listing property if they can help it. Further, the lack of urgency on the side of sellers could also reflect why prices remained firm in December.” Data from Barfoot & Thompson showed 571 new listings in December, which was low compared to previous months. However, the average number of listings per month for the calendar year was 1510, the third highest on record. The growing value of Auck- land’s housing market was reflected in the changing percentages between property selling for under $500,000 and those for in excess of $1 million, Thompson said.
Last year 8.9 per cent of all homes sold were for less than $500,000 compared with 11.1 per cent in 2016 and 14.9 per cent in 2015.
Comparatively, the percentage of homes sold in excess of $1 million was 29.1 per cent in 2015, 35.4 per cent in 2016 and 37 per cent last year.
Lifestyle and rural property sales in Auckland and Northland followed the same pattern, with sales numbers falling in comparison with those in 2016 and 2015, while prices remained relatively steady.
Mundy said although it was difficult to get a clear steer on the market’s direction, policy uncertainty could weigh on investor demand, causing prices to flat-line or fall slightly further.