Vendors in no rush to sell, supporting Auckland house prices

Monday, 5 February 2018

There were 1200 new listings with the agency in January.

A slowdown in sales has not yet led to a drop in prices in Auckland.

Barfoot & Thompson's latest data shows the average price for houses sold in the city for the month was $934,753, 1.5 per cent higher than the average for the previous three months.

Summer sellers have been willing to sit back and wait for the right offer.

The median price at $830,000 was 1.6 per cent lower than the preceding quarter.

'This stable trading trend first emerged in April last year and has rolled over to the start of the new year,' said director Peter Thompson.

'Variations of 1.6 per cent or less across a four-month period represent very little change.'

There were just 593 sales in the month, down 13.8 per cent on the average of the previous three months and 5.7 per cent down on January 2017.

Thompson was optimistic about the year.

'With prices having plateaued, stable mortgage interest rates and the potential that greater access to mortgage finance will be made available to first-time buyers and those on limited income, sales numbers can be expected to grow as we head into the traditionally strong February to August sales period.'

ASB economist Kim Mundy said the data showed sellers' lack of urgency was supporting prices and that would be helped by an ongoing supply shortage and easing of loan-to-value restrictions.

'With the election now well and truly over, sellers might be feeling more confident to re-enter the market.'

She said there had been a sharp list in new listings, with 1200 new homes on the market in the month - January's total listings were 19 per cent up on January 2017.

'Interestingly, the slow-down in sales and higher inventory levels has only slowed price growth so far, rather than reversed it. Our assumption has been that positive underlying economic fundamentals, such as a strong labour market and low interest rates, mean that sellers are in a position to either wait for a price they are happy with, or withdraw the property, rather than accept a low offer.

'The 2.3 per cent month-on-month increase in the average price to nearly $935,000 suggests that this is still the case. However, we await REINZ house price index data to confirm this, as the average price measure in the Barfoot and Thompson data can be influenced by compositional changes.'