Mortgage restrictions no barrier to Auckland price increases
December 4, 2013
Mortgage restrictions no barrier to Auckland house price increases
If the Reserve Bank restrictions on mortgage lending are to have an impact on the Auckland housing market, they are yet to show up in housing activity or sales prices.
“November was yet another busy trading month with the average sales price achieved increasing by 3.2 percent over that for October to $684,646 while the median price increased by 5.3 percent to $621,400,” said Peter Thompson, Managing Director of Barfoot & Thompson.
“What has to be factored into November’s sales figures is that it is traditionally one of the strongest trading months of the year, particularly for high end homes.
“In November we sold 189 homes for in excess of $1 million, our highest monthly number ever.
“Overall, November was less active than October, and what may have occurred in October was a rush of activity in anticipation that change was about to happen, with people determined to get their property intentions sorted ahead of that change.
“Sales numbers in November at 1118 were down 7.1 percent on the numbers for October. However, they were higher than the number sold in September, and also in line with the number sold in November last year.
“In terms of house values and turnover, November represented a solid month’s trading with numbers and values unaffected by any changes that the trading banks imposed.
“This comes as no surprise as structural changes of the type being sought by the Reserve Bank can take many months to flow into the system. If change does occur, it is likely to be towards the end of the first quarter of 2014 before its influence is felt.
“The one segment of the market where potential change may be occurring now is in the sale of homes under the auction hammer.
“There has been a reduction in the number of homes sold under hammer on the auction floor, but sales have been occurring later following negotiations between the parties.
“This may well be a sign that buyers do
not have the same flexibility as previously, and are looking
to get confirmation from their bank before completing the
“In November we sold 370 homes for under $500,000, with strong activity in south and west Auckland. While this number is significantly lower than the 457 sold in October, it is in line with the number sold in September.
“New listings for November were 1665. While 17.4 percent down on those for October, which were exceptionally high, they were still the fourth highest for any month this year.
“At month end we had 3637 properties on our books, right in line with the number at the end of October.”