Auckland house prices rise to record in September as regulations loom, Barfoot says
By Suze Metherell
Oct. 6 (BusinessDesk) - Auckland house prices rose to a record in an unseasonably busy September as buyers sought properties ahead of new regulations aimed at cooling the market, according to the city's largest realtor.
The average sale price increased 1.9 percent to $836,275 in September from a month earlier for an annual rise of 13 percent, and the median sales price advanced 4.6 percent to $790,000 for a 24 percent yearly increase, Barfoot & Thompson said in a statement. Monthly sales rose 3.3 percent to 1,358, and were 42 percent higher than September 2014.
Nearly a third of homes sold carried a price tag of $1 million or more, a record for Barfoot. Homes for $500,000 or under made up 12 percent of sales, it said.
The Reserve Bank of New Zealand has singled out Auckland property prices as a key risk to New Zealand's financial stability, while at the same time cutting its benchmark interest rates in June, July and September. To combat lower rates, the central bank will introduce new bank lending restrictions from Nov. 1, while the government introduced tax changes to cool investor activity, which came into effect at the start of this month.
Barfoot attributed the increase in sales activity to the incoming regulation.
"In part the price surge may be down to buyers getting in ahead of the new regulations around equity ratios for investors, which came into force in October, but without doubt an element of the traditional lift that comes with spring was there," Barfoot managing director Peter Thompson said. "New regulations for international buyers are due to come into force in November and these have coincided with a tightening of requirements around the export of money out of China."
New listings were at a 12-year high for a September month at 1,940, and Barfoot's end of month stock was 3,148 houses, the highest in five months. Sales at auction fell, indicating less pressure on buyers to make an immediate decision, the realtor said.
"This end of the month development carries with it a note of caution for sellers in that September's price may not prove to be the start of a new round of increases, and that buyers may not be prepared to overstretch themselves to secure a property," Thompson said.