Rise of Auckland house prices continues

Barfoot & Thompson managing director Peter Thompson

The average Auckland house price hit an all-time high of $822,148 in May, according to the latest Barfoot & Thompson data.

This was an increase of 2.2% on April’s average price of $804,282 and a 17% increase on the average price of $702,966 in May 2014.

Since February the average price has increased by 10%.

Barfoot & Thompson managing director Peter Thompson said that buyers continue to have confidence in the stability of Auckland’s residential property prices.

“Buyers are mindful that prices are at an all-time high, but the combination of a sound economy, low mortgage rates and a housing shortage gives them confidence prices are not on the verge of retreating.”

To date, new measures announced by both the Reserve Bank and the government, in a bid to reign in the Auckland housing market, have had no noticeable impact.

Thompson said this was not unexpected and that, if the initiatives are to have any influence, it is more likely to show up in June’s activity.

But, in May, sales activity was extremely strong with sales numbers up over those for April by 14.5%, he continued.

“With sales of 1,225 in May, it was the third month in a row when we sold more than 1,000 homes in a month – which was something we never achieved in 2014.”

May’s record activity meant Barfoot & Thompson ended the month with just 3,060 properties on their books.

“There have been only two months over the past 16 months when we have ended the month with a lower number of properties,” Thompson said.

“In the past decade, only in 2013 have we been able to offer such limited choice as we entered winter.”

It was properties in the $1 million plus range that attracted particularly strong buyer interest, Thompson added.

“Property sales for under $500,000 were, for the third consecutive month, below the number of $1 million sales.”

However, Westpac chief economist Dominick Stephens said that Barfoot & Thompson’s sales data has been very volatile of late.

Further, much of the data relates to housing transactions negotiated before the RBNZ announced its new macro-prudential policies and the government announced its new tax rules for investment properties, he said.

“This data has left us no closer to understanding how the Auckland housing market is reacting to the recent policy changes. We await the REINZ data, probably released next week, with interest.”