Pressure Release in Auckland13/11/2015
Figures from Barfoot & Thompson have the average sale price in Auckland increasing marginally by 0.5 percent to $840,000, with the median sale price falling 1.3 percent to $780,000. Figures from Realestate.co.nz show similar results, with the average Auckland residential asking price falling more than $18,000 during September from $851,531 to $832,713. Figures from Quotable Value show a very different state of affairs, however, with its monthly house value index showing a massive 24.4 percent annual rise to a new high of $918,153.
According to Peter Thompson, Barfoot & Thompson managing director, "These movements send mixed messages as to what is happening to prices but 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... Clearance at auctions has definitely slowed, but a significant number of sales are being concluded in post auction negotiations. A new development occurring is that it is giving conditional buyers the opportunity to enter into the negotiations."
The latest data may be a result of new tax conditions, with the Reserve Bank loan to value ratio changes only taking effect on October 1. While Housing Minister Nick Smith says "It's too early to draw conclusions as to whether those measures have been successful in dampening the overheated housing market," the latest data seems to suggest some effect. According to Dr Smith, however, "The Government will be looking at a longer period of time. By about February next year, we will have a clearer idea of the measures and more reliable information on the scale of overseas buyers and have sufficient number of months, whether it's building consent or sales figures."
While data released by Quotable Value seems to contradict figures from Barfoot & Thompson and Realestate.co.nz, closer inspection seems to suggest otherwise. While "Home values across the Auckland region continued to show massive value increases over the past year," according to Quotable Value, prices are starting to stabilise when viewed on a monthly basis. The house value index only increased by 2.4 percent from September to October, rising from $896,676 to $918,153 after previous monthly increases of 4.9 percent and 7.3 percent respectively.
Jan O'Donoghue, QV homevalue operations manager, admits their latest data does not yet reflect changes in the Auckland market: "Activity appears to have eased a little, which could be due to uncertainty caused by the introduction of new changes aimed at curbing investors in the Auckland market. The new policies seem to have taken the wind out of the sails of the Auckland housing market over recent weeks, however values are still rising, so it may take some time before we know if these moves will have any impact on values."
Image source: macro-vectors/shutterstock.com