HOUSING COMMENTARY By Miriam Bell
Slower times ahead I
t’s a conundrum. Market reports and data indicate more subdued sales activity and less demand in many markets, around the country. Yet house prices just keep raising. And the ongoing supply shortage is still far exceeded by demand. So is the quieter market due to the traditional summer slowdown? Is it a temporary impact from the latest LVRs? Or could it be the start of a turning point for the recently supercharged market? The latest data is a mixed bag and renders easy assessments difficult. The future is unclear. But the data does highlight one thing consistently: Auckland’s market has fallen far from its former pace, leaving regional markets to provide the heat.
SUPER CITY SNOOZE There can be little doubt that Auckland’s recently boiling market has slipped into a significantly slower mode. December’s data all tells the same story. And it’s a tale of reduced price growth, declining sales and increasing listings. After following an upwards trajectory for months, Auckland’s prices dropped in December. REINZ, Trade Me Property and Barfoot & Thompson all recorded a fall in the region’s prices,
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The housing market has cooled, with some regional exceptions, and, while there is no consensus on the future, some experts predict far more sedate growth moving forward, discovers Miriam Bell.
while QV’s data showed a decline in values. Only Realestate.co.nz had the region’s prices increasing – and it was a marginal increase. The QV data also showed a significantly slower rate of value growth in Auckland. The average value was up by 1.5% over the past three months (to $1,047,179), as compared to November’s data which showed a 3.7% rise over the past three months. Further, it has Auckland’s values increasing by 12.2% year-on-year or, once adjusted for inflation, by 11.9%, as compared to 12.6% in November’s data. This was the slowest rate of increase in the city’s annual value since January 2015. Barfoot & Thompson managing director Peter Thompson says signs that Auckland’s rate of price growth was declining have been there since mid-year and that decline showed in the prices achieved at year end. His agency’s data showed the average price declined by 2% (to $913,709) and the median price by 1.8% (to $840,000) in December. Year-onyear, the average sales price increased by 8.6%, which was the lowest increase in four years.
LISTINGS UP, SALES DOWN Thompson says new listings were the highest in a December for many years. “At year end we
had 3270 properties on our books, which is the highest number at year end for four years, and more than a third higher than it was at the same time last year.” Realestate.co.nz’s data also showed that listings continue to go up in Auckland, in stark contrast to other parts of the country. It had the total number of properties for sale up by 18.4% year-on-year. Meanwhile, sales volumes in Auckland were also down – both on November and year-onyear, according to the December REINZ data. Once seasonally adjusted, the region’s sales volumes in December were 2% lower than in November. However, new REINZ chief executive Bindi Norwell says Auckland’s long-term median price trend has been consistently rising, despite December’s slight easing. “The combination of factors, such as strong underlying population growth and a lack of supply, suggests we may be unlikely to see much change to the upward trend in prices - unless these fundamentals change.”
REPEAT PATTERN? While the Auckland market’s cool down is very real, speculation over how long it will continue remains rife. Many commentators have pointed out that the market has slowed down for a
