Auckland house prices are still rocketing ahead but bank economists are forecasting flattening to falling prices.
Barfoot & Thompson said today average prices rose from $1.07 million in February to $1.1m last month and the median went from $1.01m to $1.04m. Auckland annual average prices for homes sold by the agency rose 11.5 per cent and the median rose 13.3 per cent.
"In terms of both prices paid and the number of homes sold, this March was the strongest trading month in the company's history," said Peter Thompson, managing director of Barfoot & Thompson.
"The average price paid in March was $1,107,869, up 2.7 percent on the average price for the previous three months, and the median price was $1,048,000, up 5.1 per cent on that for the previous three months."
Westpac acting chief economist Michael Gordon says the new Government policies announced this month mean "house prices could settle around 10 per cent lower over the long term".
Last month, Westpac chief economist Dominick Stephens said house prices were still rising but the market is "past its peak", mortgage interest rates will rise and Auckland house-building is finally catching up with demand and the shortage will be zero by 2028.
Nick Tuffley, ASB chief economist, yesterday forecast flat national house prices for the rest of the year after this month's Government's housing policy announcement.
"We have essentially flat-lined our house price outlook for the rest of 2021, made slight trims to our consumer spending and construction forecasts, and nudged up our rent outlook," Tuffley said.
"That would still mean annual growth in 2021 of around 9-10 per cent, compared to our view of 15 per cent before the housing announcement," Tuffley forecast.
After this year, national house prices will only rise 3 to 5 per cent annually, he forecasts.
Acting Real Estate Institute acting chief executive Wendy Alexander said Auckland median prices would need to drop drastically, by as much as $750,000 to be classified as affordable again.
"This would mean median prices in Auckland would need to be around the $350,000 mark which they haven't been for more than 10 years now," Alexander says.
Peter Thompson, Barfoot & Thompson managing director, said the agency got 2138 new listings last month, the highest for a March in 15 years "and about a quarter higher than we would normally list at this time of the year.
"It gave buyers greater options than have been available for some months and they were quick to take advantage," he said.
The agency sold 1844 homes, the most it had ever sold in the month of March.
"While buyers were committed and prices rose, the rate at which prices increased during the month was in line with what has been experienced since the start of the year," he said.
In the first quarter of this year, the agency had sold 4054 homes.
"This is a third higher than the number of homes we sold in 2015, which was the past peak first quarter selling period, and came during the highs of the last price cycle," he said.
"At month's end we had 3394 properties for sale on our books, the lowest number at the end of March for five years."
Based on sales numbers, the reintroduction of LVRs appeared to have had limited impact so far, he said.
But LVRs were only reintroduced in March.
Thompson said: "The shortage of residential listings is pushing some buyers into considering lifestyle bare blocks or existing homes, ensuring lifestyle blocks continue to sell well."
Owen Vaughan, editor of NZME-owned property listing site OneRoof, said: "The top of the market is still going stong in Auckland, but we have noticed a slowdown at the lower end of the market, with investors not as active in March as they had been in January and February.
"While it's too early to call an end to the property market's remarkable hot-run post-Covid - and Barfoot and Thompon's figures show there's heat still in the market - the retreat by investors suggests price growth will be at much slower rate in the months ahead," Vaughan said.