Auckland prices slow... for now

Barfoot & Thompson managing director Peter Thompson

According to the latest Barfoot & Thompson data, Auckland’s average sale price increased by 0.5% to $840,402 in October, from $836,275 in September.

At the same time, Auckland’s median price declined by 1.3% to $780,000 in October, from $790,000 in September.

Barfoot & Thompson managing director Peter Thompson said these figures made for mixed messages in terms of price movements.

“What is clear is that the rate of price rise that occurred in September at the start of the spring season has not been sustained.”

This means the jury remains out on whether the latest Reserve Bank LVR and Government tax initiatives have halted the rise in Auckland house prices, he said.

But he said market trends had definitely changed, although it was too early to tell whether those changes would have a permanent influence on prices.

Sales, new listings and auction clearance rates were all down, while the stock on market at month’s end was up, as compared to September.

Thompson said that while October’s sales numbers were solid, they were down significantly on those for September (by 21.4%) and were the lowest in any month this year since February.

“At present, the market is balanced and sales numbers and prices between now and Christmas will determine where prices go in the new year.”

Some other industry commentators agree the Auckland market has slowed – but don’t believe the slower pace will last.

City Sales managing director Martin Dunn said the market has turned and there is now some breathing space.

“I don’t think prices will drop dramatically. But their growth will flatten out for a short period. And then they will start creeping up again.”

The current situation is in favour of buyers, but Dunn said Auckland still won’t become a buyer’s market.

Kris Pedersen, from Kris Pedersen Mortgages, said the market had come off the boil.

But he too doesn’t think the slowdown will last – due to the combination of low interest rates, high demand due to population growth and migration, and the ongoing supply shortage.

“Auckland’s market might be a bit sluggish till the end of the year and then it will probably pick up again in the first quarter of next year.”

It is too soon to tell whether the LVR and tax changes will have a lasting impact on the Auckland market, Pedersen added.