Jamie Gray is a business reporter for the NZ Herald

Auckland house prices steady in December, sales down

Support for demand via low interest rates and strong population growth may have outweighed the impact of the new housing measures in December. Photo / NZ Herald
Support for demand via low interest rates and strong population growth may have outweighed the impact of the new housing measures in December. Photo / NZ Herald

Auckland property prices were steady in December but sales were at their lowest level for 22 months, the real estate agency Barfoot and Thompson said.

The agency, which lays claim to selling around one in three Auckland residential homes, said there was a significant fall in the number of sales compared to those in November and December, 2014.

"Sales data for the final month of the year is sending mixed messages as to where the market will head in 2016," Barfoot and Thompson director Peter Thompson said.

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The average sales price for December at $869,492 was down 0.8 percent on November's record average price, while the median price rose to an all-time high of $800,000, up 0.6 percent on that for November. From a price perspective, the market was "rock steady," Thompson said.

However, sales for the month - at 796 - were 19.3 percent lower than in November, and it was the lowest number of sales in a December for four years. December's sales were also the lowest in any month for the past 22 months.

The factor most likely to impact on January sales was the extremely low number of listing at the end of December which, at 2431, was down 25.2 percent on those in November, and the lowest number for any month for more than 20 years, Thompson said.

With a growing population and the number of new builds failing to keep pace with demand, competition for properties is likely to remain strong in the first quarter of 2016.

In December 278 properties sold for in excess of $1 million and a further 202 for in excess of $750,000. Sales of properties in the under $500,000 price category were 44, representing 5.5 percent of all sales.

In 2015, the average sale price of homes for the full year was $817,096, an increase of 14 percent on that for 2014, and 25.8 percent over 2013's average sales price.

The median price for 2015 was $755,333, 17.4 percent higher than 2014's median price and 30.5 percent higher than that for 2013."

ASB Bank, in its analysis of the data, said the Auckland housing market remained supply-constrained, especially as demand stabilised in December.

Support for demand via low interest rates and strong population growth may have outweighed the impact of the new housing measures in December. Further, the drop in total inventory levels over December will keep the market tight, ASB economist Kim Mundy said.

"Even with Auckland house sales below levels seen in mid-2015, listings remain incredibly low relative to demand," Mundy said.

"This pressure might begin to ease if demand turns lower again due to the new housing measures, but as mentioned earlier, it is too early to tell what the extent of the impact on demand will be," she said.

Over time, increased housing construction should also help alleviate Auckland's housing market imbalances. "But, given the relatively muted lift in Auckland building construction recently, particularly relative to population growth, this adjustment remains some time off," she said.

- BusinessDesk

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