Auckland house prices ease but rents rising
Wednesday 1 August 2007
June residential sales figures for Auckland fell back slightly after their strong upward trend in the first part of the year, latest Crockers market research reveals.
“No doubt softening under the pressure of rising interest rates, the market recorded a 10% year-on-year increase in the median sales price (down from 17% in April),” the Crockers report says.
The median price now sits at $445,000.
Sales numbers were also down, with an 8% year-on-year decline, in contrast to increasing sales in previous months.
Sales figures for the whole country show a similar pattern: a small drop in the median price in June (down to $347,500, which is still up 12% year-on-year), and an 11% decline in the number of sales compared to June 2006.
There were signs in May that average rents might finally be starting to climb. June figures suggest that May was no flash in the pan – at least as far as newly let properties are concerned.
For three-bedroom properties let during June, the average rent per week was $419; up from $408 in April, and a 5% year-on-year increase. In the two-bedroom market, the year-on-year increase was even larger: 8%, with an average rent of $320 per week across Auckland.
Nationwide rents in June recovered from their dip in May, showing significantly higher increases than Auckland.
Across the country:
• Two-bedroom rental levels have risen 17% year-on-year, but only 8% in Auckland
• Three-bedroom rental levels have risen 19% year-on-year, but only 5% in Auckland.
This continues the trend of Auckland rental properties delivering relatively poor returns compared to their counterparts in other parts of the country, the report says. “This can be put down, quite simply, to high property prices in Auckland.”
Commenting is closed
Next month’s Reserve Bank Financial Stability Report will review the state of the housing market and the implications of that on loan-to-value restrictions, the Reserve Bank governor says.
More residential property investors should consider commercial investments as an alternative, one commentator says.
The Reserve Bank today published its summary of submissions relating to proposed changes to bank capital adequacy requirements for housing loans. It includes proposed changes that have potential to hit property investors with increased interest costs.