Auckland house sales slip, median price rises, Barfoot says
Auckland house sales slip, median price rises in last month before LVR Barfoot
Oct. 3 (BusinessDesk) - Auckland house sales fell in September, the last month before the Reserve Bank’s restrictions on high loan-to-value home loans kicked in, while the median price climbed, according to realtor Barfoot & Thompson.
Sales fell 7.9 percent to 1,105 in September from August and were up 14 percent from September 2012, the firm said in a statement. The median house price rose 6.9 percent to $600,000, an all-time high, while the average price edged up 1.6 percent to $657,912.
Barfoot’s new listings fell 4.3 percent from August to 1,636 and were up about 29 percent from a year earlier. The firm had 3,191 listings on its books at the end of September, the highest since April.
From Oct. 1, the Reserve Bank has required banks to restrict mortgage lending to borrowers with less than a 20 percent deposit to no more than 10 percent of their total lending. The central bank has been forced to defend the policy in the face of criticism from opposition politicians, banks and builders that it will hurt first home buyers, limit supply of new housing and fail to significantly stem house price rises.
“It remains to be seen just how much of an impact the RBNZ’s new ‘speed limits’ on high-LVR lending will have on mortgage approvals and housing demand,” said Daniel Smith, economist at ASB. “While there will be some impact on demand, the fundamentals of the Auckland housing market are unlikely to turn around quickly.”
“With Auckland’s supply constraints likely to persist for several years, we expect house prices to continue increasing,” Smith said. “However, the rate of increase is expected to slow; we anticipate the annual rate of growth will peak in Q4 2013/Q1 2014. The recent lift in listings will contribute to that process, as will the RBNZ’s new restrictions.”
A shortage of houses in Auckland, the nation’s biggest city, has spurred the government to introduce legislation that would fast-track developments and create special housing areas.
Barfoot managing director Peter Thompson said it could be three to six months before the impact of the central bank’s new LVR policy can be assessed.