The New Zealand Herald
House prices tipped to stall or fall
Auckland house prices are still rocketing up but bank economists are forecasting flattening to falling prices. Barfoot & Thompson said yesterday average prices rose from $1.07 million in February to $1.1m last month and the median went from $1.01m to $1.04m. Auckland annual average prices for homes sold by the agency rose 11.5 per cent and the median rose 13.3 per cent.
“In terms of both prices paid and the number of homes sold, this March was the strongest trading month in the company’s history,” said Peter Thompson, managing director of Barfoot & Thompson.
“The average price paid in March was $1,107,869, up 2.7 per cent on the average price for the previous three months, and the median price was $1,048,000, up 5.1 per cent on that for the previous three months.”
Westpac acting chief economist Michael Gordon said the new Government policies announced last month mean “house prices could settle around 10 per cent lower over the long term”.
Nick Tuffley, ASB chief economist, this week forecast flat national house prices for the rest of the year after last month’s Government’s housing policy announcement.
“We have essentially flatlined our house price outlook for the rest of 2021, made slight trims to our consumer spending and construction forecasts, and nudged up our rent outlook,” Tuffley said.
“That would still mean annual growth in 2021 of around 9 to 10 per cent, compared to our view of 15 per cent before the housing announcement,” Tuffley said. He believes after this year national house prices will only rise 3 to 5 per cent annually.
Real Estate Institute acting chief executive Wendy Alexander said Auckland median prices would need to drop by as much as $750,000, to be classified as affordable.
“This would mean median prices in Auckland would need to be around the $350,000 mark which they haven’t been for more than 10 years now,” Alexander says.