Auckland property market subdued by tougher lending conditions
The combination of tighter mortgage lending restrictions and perceptions that residential property is fully priced continues to slow Auckland housing activity.
Property prices and sales were restrained in Auckland in September as New Zealand’s busiest real estate market copes with tighter mortgage lending rules.
The latest data from real estate firm Barfoot & Thompson shows that while average prices increased by 1.5% month on month the medial price increase was only 0.8% the same as it was in the previous three months.
Peter Thompson, the firm’s managing director, pointed out that even the month on month average rise was only 2.9% higher than the previous three months and listings were also down in September.
‘With the arrival of Spring, housing activity normally lifts, but it has not been the case this year. Rather, the market continued the trend which first showed in July of prices increasing at a much slower rate that in the past two to three years,’ he said.
‘While in September the average price increased, compared to August, the median price actually stayed constant. Compared to what was happening to prices last September, the Auckland housing market is subdued and we are now looking at a totally different market to 12 months ago,’ he added.
The average sales price in September was $919,849 and the median price $850,000 while sales were up 4.8% month on month but own 2% on the average for the previous three months.
New listings were down 10% compared to those for August and down 6% quarter on quarter and down a much more significant 20.8% compared to September last year.
High end sales were unaffected by the more restrained market, with 403 properties, or 38.3% of properties sold, achieving a value of $1 million or more, while 7.7% of properties sold for under $500,000.
New lending rules were introduced at the beginning of October. They mean that investors seeking new property loans nationwide need to have 40% equity or deposit and there has already been a drop in the number of buy to let mortgages being granted.
Average Auckland residential property values have jumped 15.9% in the past year from $874,851 to $1,013,632 according to real estate data provider CoreLogic. But the rate of increase has slowed from a peak of 24.4% in the year to last November.