Auckland house prices rise in August

Press Release – BusinessDesk

Auckland house prices rise in August, market firm ahead of election, Barfoot says

By Sophie Boot

Sept. 5 (BusinessDesk) – Auckland’s average house price gained in August, with the market remaining firm in the lead up to the general election this month, says realtor Barfoot & Thompson.

The average price rose 1.2 percent to $918,926 from a month earlier and was 1.4 percent higher than in August 2016, the city’s biggest realtor said in a statement. Sales rose 4 percent compared to July, to 777, though they were down 23 percent on a year earlier.

“For the past six months there have been only minor variations in the pattern of lower sales numbers and prices remaining firm,” said Peter Thompson, managing director of Barfoot & Thompson. “The reality of the situation is that prices are remaining stable, and sales numbers are running at two-thirds of where they were 12 months ago.”

There were 1260 new listings in the month, up 7.4 percent from a month earlier but down 26 percent from August 2016. Thompson said this drop in listings was not unexpected one month out from a general election and the realtor had 3,993 properties on its books at the end of August, the highest number of properties at the start of a September month for six years

“It provides a good platform for the market to operate from once the election is behind us,” Thompson said. “With a well performing economy, relatively low mortgage interest rates and strong population growth, there is every reason to anticipate over the medium term the housing market will retain people’s confidence.”

Sales of houses for less than $500,000 accounted for 11.6 percent of all sales in the month, while 35.5 percent of sales were for more than $1 million.

The data follows the QV house price index last week which showed inflated Auckland house prices continued to moderate after several years of rapid gains, with annual growth in New Zealand property values dropping below 5 percent for the first time in five years.

The QV house price index rose 4.8 percent in the year to August, the slowest annual rate since August 2012 and down from an annual increase of 6.4 percent in July. Values increased 1.2 percent to a national average $641,648 in the three months ended Aug. 31, more than double the previous market peak in late 2007.

QV noted that a lack of listings over winter, loan to value ratio mortgage restrictions and stricter lending criteria by retail banks led to a 30 percent drop in market activity and sales volumes compared to the same time last year, compounded by the general election, but that house prices may begin to rise again in the new year as the underlying drivers of a lack of supply and high net migration remain, particularly in Auckland.

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