Auckland house sales volumes, prices rise in November, Barfoot says

Wednesday 3rd December 2014

Auckland house sale volumes and prices increased in November as activity rebounded from a slowdown around September's general election, according to the city's largest real estate agency.

House sales climbed 18 percent to 1,105 in November from October, Auckland real estate agency Barfoot & Thompson said in a statement. The average price increased 2.8 percent to a record $756,909.

The housing market in New Zealand's largest city has rebounded following a quiet patch in the lead up to the Sept. 20 general election as buyers sought certainty in housing policy. Still, sales volumes remain 1.2 percent below last year's levels as the Reserve Bank's loan to value ratio limits on high debt mortgage borrowing and its series of official cash rate hikes weigh on activity in a market where the supply of housing isn't meeting demand.

"Auckland house sales lifted due to increase in new supply, " ASB Bank senior economist Jane Turner said in a note. "The higher turnover was afforded by the post general election increase in new listings. Nonetheless, turnover remains at relatively low levels and has yet to return to levels seen late 2013 prior to the 100 basis points of OCR hikes and the introduction of high LVR restrictions."

The real estate agency noted it had 1,693 new listings in November, down 4.1 percent on October.

"With new supply remaining at low levels the Auckland housing market remains very tight," Turner said. "The imbalance between buyers and sellers will continue to persist and place upward pressure on houses."

Barfoot & Thompson said record sales prices weren't deterring buyers, with the agency selling 225 homes for more than $1 million in November, only the second month it had ever sold more than 200 homes a month in this price segment.

So far this year, the agency has sold a third more homes worth $1 million or more than at the same time last year.

Meanwhile, the agency said sales of homes under $500,000 were at the lowest level for any month this year, reflecting the Reserve Bank's mortgage lending restrictions.

"The chances of the high LVR lending restrictions being removed any time soon are looking increasingly dim, in fact the greater risk is that the next move is a tightening, rather than a loosening, of macro-prudential policy," Westpac Banking Corp senior economist Michael Gordon said in a note.

BusinessDesk.co.nz

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