This month’s Barfoot & Thompson data showed Auckland’s average sale price hit an all-time high of $826,474 in June.
However, Barfoot & Thompson managing director Peter Thompson said that, while the market had its busiest June in 11 years, the rate at which average house prices rose slowed considerably.
The average sale price increased by only 0.5%, or a little over $4000, on that for May yet, over the previous three months, prices increased by an average of 3.2% a month, he explained.
This means the June year-on-year increase was now 15.7% - which was considerably lower than that of the first five months of the year.
Thompson said the looming LVR and tax measures, along with the traditional winter slowdown, were likely to be having some impact on prices.
“But there is also a growing feeling among buyers and sellers that homes are close to being fully priced.”
He added that the 20% LVR regime was severely impacting on sales numbers in the under $500,000 category.
“An easing of restrictions as it relates to homes of $500,000 and below would potentially redress the current declining sales trend, and also help lower the average selling price.”
Barfoot & Thompson’s listings data showed that constricted supply remains a problem.
Thompson said that, at the end of June, the agency had only 2959 properties on their books.
“June was the third month in a row when the number of properties for sale at month end declined, and choice is now the most limited it has been since last Christmas/New Year.”
However, ASB senior economist Chris Tennent-Brown wasn’t convinced Auckland house price growth was slowing.
He said the Barfoot & Thompson data showed the Auckland market remains hot, even as the weather cools.
“We expect continued strength in Auckland house price inflation, reflecting the still-low level of listings, strong population growth and the extra boost from declining mortgage rates.”
ASB was expecting the Reserve Bank to cut the OCR three more times over the coming months, Tennent-Brown said.
This would add to the downward pressure on mortgage rates and would provide an opposing influence to the impending Auckland investor lending restrictions and tax changes.
“The Auckland housing market remains supply constrained at a time when demand is very high. These dynamics continue to support prices.”
Westpac senior economist Michael Gordon also thought that the Barfoot & Thompson data suggested the Auckland housing market had maintained its recent trends in June.
“There is no sign that either buyers or sellers are 'rushing for the door' ahead of the new tax rules and lending limits that were announced in May and take effect in October.”
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