Morgan Tait

Morgan Tait is the NZ Herald's consumer affairs reporter.

Number of city's sub-$400k properties dwindle by a third

Photo / File
Photo / File

The number of houses, flats and apartments valued under $400,000 in Auckland dropped by a third in the past 12 months.

In some areas the total in that price bracket has more than halved.

Data from CoreLogic's E-Valuer showed that of the 656,500 properties valued in that price bracket across the country, just over 62,000 were in Auckland.

A year ago there were 91,000 in the city - a drop of 32 per cent.

CoreLogic research and analytics director Jonno Ingerson said the drop was most significant in North Shore and Waitakere, where the number of properties in the $400,000 or less price bracket had fallen 55 per cent.

"Clearly the number of properties worth less than $400,000 has dropped - and, in Auckland, quite dramatically," Mr Ingerson said.

"But a corresponding drop in the number of sales does not mean that the bottom of the market has fallen away, just that there are fewer to buy."

Mr Ingerson crunched the numbers as part of his comment in today's Herald Property Report that debunked talk that loan to value ratio (LVR) restrictions in lending had slowed sales at the lower end of the market.

Since October all banks have had a 10 per cent cap on new lending to home-buyers with a deposit of less than 20 per cent.

Mr Ingerson found that more houses, flats and apartments priced in the bottom 10 per cent of sales values were being sold in Auckland than at the same time last year.

In the first three months of the year, 11.7 per cent of sales in greater Auckland were from properties in the bottom 10 per cent of the price ladder.

A year ago, that was 10.1 per cent.

"Rather than the bottom end of the market plummeting since the LVR speed limits came on, activity has stayed stronger than the long-term average and above the same time last year," he said.

Harcourts chief executive Hayden Duncan said the findings were further evidence of what real estate agents had been observing since the LVR restrictions were introduced.

"[LVR restrictions] are a complete waste of time," he said. "It hasn't had any effect other than to those that are the most vulnerable."

- NZ Herald

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