Auckland house sales plunge 24% in April as interest rates rise, loan restrictions weigh
May 5 (BusinessDesk) - Auckland house sales dropped by almost a quarter in April from a year earlier as rising interest rates and restrictions on low-deposit mortgage lending weigh on demand, according to Barfoot & Thompson, the city’s biggest realtor.
Sales dropped to 811 in April from 1,062 a year earlier, and were down from 1,392 in March. The average sale price dropped to $708,603 from $725,708 in March, but was still up from $643,089 in 2013. The median sale price fell to $619,550 from $652,000 in March, and was up from $566,000 in 2013. Listings increased to 3,623 in April from 3,570 in March, and were up from 3,467 a year earlier.
“It shows ongoing support in the Auckland property market, but more listings creates more choice, and that ultimately softens prices,” managing director Peter Thompson said in a statement. “Undoubtedly the loan-to-value ratio and interest rates were also keeping prices in check.”
Auckland’s property market has been a bugbear for the Reserve Bank as prices accelerated in the face of a supply shortage, and prompted the introduction of restrictions on low-equity home lending as a means to cool the sector.
The restrictions have had a greater impact on first-home buyers and caused a drop-off in cheaper housing.
Barfoot said about 37 percent of sales were below $500,000, and sales of $1 million homes rose to 120 from 103 a year earlier.