Heat dissipates
The urgency to buy a property no matter what it costs has gone, an Auckland real estate agency says.
Auckland house prices rose by the lowest annual rate in five years in
2017, data from Barfoot & Thompson shows.
Peter Thompson, managing director of the Auckland real estate agency, said the market had been ‘‘reined in’’ from rapid rises.
In 2017 the average selling price for the city increased by 4.5 per cent to $926,632, and the median selling price rose by 2.7 per cent to
$843,583.
‘‘What did change significantly in 2017 was the number of homes sold, which fell by more than a quarter on the numbers sold in each of the previous three years,’’ he said.
‘‘The sense of urgency to buy a property regardless of its asking price has disappeared. It has been replaced by buyers taking a more considered approach.’’
Thompson said there was still buyer support for current prices.
The agency sold 674 homes in December, with an average sale price of $938,871, up 2.6 per cent on the previous three months. The median price was $870,000, 3.6 per cent higher.
‘‘Undoubtedly, the measures progressively introduced by the Reserve Bank, a more prudent approach to mortgage lending by the trading banks and a growing apprehension among buyers as to the prices being paid all played their part in cooling the market,’’ Thompson said.
‘‘At the same time, a housing shortage when the population is growing creates demand.
‘‘New listings in December at 571 were low, but for calendar 2017 the average number of listings each month was 1510, the thirdhighest on record.’’
ASB chief economist Nick Tuffley said there was still uncertainty about the implications of the election result on the market, particularly for investors considering tax changes.
‘‘We’ve seen generally people have been quite cautious about buying and selling since the election result became clear and it looks like that’s continued over December.’’
While turnover had lifted, he said that was against a subdued spring and early summer period.
But he said he expected prices to find a floor because there was still strong population growth and limited building activity.
In 2017, 8.9 per cent of all homes sold by Barfoot & Thompson were for less than $500,000.
In 2016 the comparative percentage was 11.1 per cent and in 2015 14.9 per cent.
Last year, 37 per cent of homes went for more than $1 million, up from 35.4 per cent in 2016.