Auckland price rises: a lesson in supply & demand

The realtor’s April data shows the SuperCity’s average residential property price has now hit $804,282, which is an increase of 3.5% on March.

It also shows Auckland’s median price is now $753,500, which is an increase of 6% on March and a hefty increase of 21.6% (or $134,000) on April 2014.

Barfoot & Thompson CEO Wendy Alexander said that, while these are significant increases, they are not out of the ordinary - in that they are similar to the levels of increase experienced over the past two years.

“Demand for property remained rock solid in April, and is reflected in the prices buyers were prepared to pay. Sales numbers during the month were the highest they have been in an April in the past decade.”

However, new listings fell which means the realtor is entering May with the lowest number of properties since the beginning of the year.

Alexander said lack of choice is again becoming an issue.

Barfoot & Thompson’s data showed the Auckland region’s housing market remained strong, Westpac chief economist Dominick Stephens said.

“Higher sales and lower new listings meant that the stock of homes available for sale fell for the first time since December,” he said.

“The supply of homes for sale remains tighter than it was during the mid-2000s boom.”

Stephens noted the sharp rise in average sale price, but said the data is heavily influenced by the composition of sales from month to month.

“In this case, there was a heavy skew towards sales of million-dollar properties in April - much more than could be explained by bracket creep.”

Meanwhile, realestate.co.nz’s latest monthly data also showed an increase in Auckland’s average asking price (to $789,581) and a fall in listings.

Realestate.co.nz CEO Brendon Skipper said that new listings and total inventory had plummeted nationwide.

The number of new listings was the lowest realestate.co.nz had recorded for April and was a drop of 18% on March and of 5.6% on April 2014.

Skipper said the drop in listings coupled with the record low total inventory shows that sellers in many parts of New Zealand are experiencing very favourable conditions.

“As a result, robust average asking prices continue to be maintained at record levels, and the market appears to be meeting them.”