Auckland house sales fall 5.7% in January as listings grow

Article – BusinessDesk

Auckland house sales fall 5.7% in January as listings pipeline grows

By Paul McBeth

Feb. 5 (BusinessDesk) – The number of houses sold in Auckland fell 5.7 percent in January from a year earlier, even as prices edged lower, with the pipeline of available properties in the country’s biggest city swelling to a six-year high, says realtor Barfoot & Thompson.

There were 593 sales in Auckland last month, down from 629 a year earlier, and the median house price fell 1.6 percent to $830,000, continuing the trend of slowing turnover as the real estate market cools down on tighter credit criteria and restrictions on highly-leveraged borrowing. Some 1,200 houses were listed in the month, up 5.1 percent from a year earlier, and leaving 4,320 properties available for sale at the end of the month compared to 3,620 at the end of January 2017.

“Given January’s short holiday interrupted trading period, caution needs to be attached to drawing strong conclusions from the month’s sales,” managing director Peter Thompson said in a statement. “With prices having plateaued, stable mortgage interest rates and the potential that greater access to mortgage finance will be made available to first first-home buyers and those on limited income, sales numbers can be expected to grow as we head into the traditionally strong February to August sales period.”

New Zealand’s housing market posed headaches for policymakers for several years as a dearth of supply was compounded by an influx of demand, driven in part by cheap finance and record migration flows. The Reserve Bank imposed restrictions on mortgage lending on deposits of less than a fifth, which largely hit first-home buyers, and later extended those to investors. The central bank has signalled the limits on high loan-to-value ratio lending will be eased this year, although rising global interest rates may lift local mortgage rates.

Barfoot’s Thompson said properties sold for less than $500,000 accounted for just 8 percent of sales in January, compared to 13 percent a year earlier, while 27 houses were sold for $2 million and 170 for $1 million, in line with the same period a year earlier.

The average sale price rose 2.3 percent to $934,753 from January 2017.

(BusinessDesk)

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