A range of responses

CoreLogic’s Jonno Ingerson says he was premature thinking the upcoming general election was giving home buyers and home owners the jitters. “I still think that will happen, but probably only once the election campaigns really ramp up in a few months,” he says. “We will be into winter by then, which is typically a quiet time anyway.”

Sales data collected by the firm, shows different patterns emerging across Auckland.

Jonno says the most recent data has seen North Shore and old Auckland City bounce back up, while Manukau and Waitakere continue to slide. Meanwhile, the fringe areas — Rodney, Papakura and Franklin — have just slowed their rate of increase rather than showing any sign of dropping.

“Manukau and Waitakere have tended to be stronger first home buyer areas, so with those buyers less active, declines in those areas are not unexpected,” he says.

North Shore and Auckland City properties in the $ 800k to $ 1.5 million range have shown more resilience than the top and bottom ends of the market. Jonno reckons buyers in these markets are less impacted by Reserve Bank’s lending restrictions.

He says across the rest of the country, the lending restrictions have not hit as hard as they have in Auckland.

“All this begs the question as to whether the Reserve Bank’s lending restrictions have either not worked, or have worn off already.

“Bear in mind that the Reserve Bank is not specifically trying to lower house prices. It is trying to protect the banks and wider economy against any potential significant correction. Making sure borrowers have larger deposits, and lending is more prudent are two ways of achieving that.

“The Reserve Bank’s stats show lending to investors has dropped by 35 per cent since the introduction of the restrictions.

“As for house prices dropping? Well there may be a more lasting impact in Waitakere and Manukau, but elsewhere it looks like we are back to increases. At least for the time being.”

As the Reserve Bank said just prior to announcing the restrictions, slowing down the housing market would take a combination of increasing interest rates, lower migration, and massively increasing housing supply.

“Ultimately we have too many people for the number of houses, and until that is resolved it is difficult to see values dropping.”