Tighter lending and high prices slows Auckland property market
A combination of tighter mortgage lending restrictions and perceptions that residential property is fully priced continues to slow activity in Auckland housing market, the latest overview report suggests.
In September new listings were down and sales numbers and prices were restrained and so far the normal spring lift has not materialised, says the report from agents Barfoot and Thompson.
The firm’s data shows that while average prices increased in September month on month the median price stayed constant. The average sales price in September was $919,849, some 1.5% higher than for August but up only 2.9% on the average for the previous three months. The median price movement is even narrower, and at $850,000 is exactly the same as it was in August and up only 0.8% for the previous three months
‘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,’ said Peter Thompson, managing director of Barfoot & Thompson.
‘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 data also shows that sales for September were up 4.8% month on month but down 2% on the average for the previous three months while new listings were down 10% on those for August, are down 6% on those for the previous three months and down 20.8% year on year.
Thompson pointed out that high end sales, however, have been unaffected by the more restrained market, with 38.3% of properties sold, achieving a value of $1 million or more while 7.7% of properties sold for under $500,000.
The review also reveals that average rent for two bedroom properties in Auckland is currently $435 and apartments and townhouses consistently receive higher rents than the Auckland average.
Apartments account for almost half of all two bedroom properties that Barfoot & Thompson manages and 60% of apartments are in central Auckland or in the central suburbs, with two bedroom properties receiving the highest average rental at $518.
Most townhouses are in the central or Eastern suburbs, where tenants are paying a premium for the location and the cheapest area to rent a two bedroom property is in the outskirts of Auckland such as Franklin and Rodney, but also in Pakuranga and Howick, followed by central Auckland.
Thompson explained that with the amount of houses under construction today, especially the apartment boom in the central city, it will be interesting to monitor these measurements over time. ‘Eventually you would expect that majority of two bedroom homes will be apartments in the future,’ he added.