Auckland property plateauing? New stats point to pause

Barfoot and Thompson says average sales prices in Auckland were up 0.5pc while the median sales price fell. Photo / Doug Sherring

Auckland's biggest real estate agency says median house prices dropped 1.3 per cent last month and its chief also acknowledged auction clearance rates had "slowed".

Peter Thompson, Barfoot & Thompson managing director, said average sale price increased only marginally last month by 0.5 per cent to $840,000 but median price fell to $780,000.

"These movements send mixed messages as to what is happening to prices but what is clear is that the rate of price rise that occurred in September at the start of the spring season has not been sustained," he said.

"Clearance at auctions has definitely slowed, but a significant number of sales are being concluded in post auction negotiations. A new development occurring is that it is giving conditional buyers the opportunity to enter into the negotiations."

"It is worth noting that our records show that the median price tends to be more volatile on a monthly basis than the average price. Sales numbers in the month at 1068 were solid but they were down significantly on those for September (by 21.4 percent) and were the lowest in any month this year since February," said Thompson.

"Since the Reserve Bank announced an equity ratio increase for investors and the Government new rules for non-resident buyers, market trends have definitely changed. Sales numbers are definitely down but it is too early to say whether the changes will have a permanent influence on prices," he said.

"At present, the market is balanced and sales numbers and prices between now and Christmas will determine where prices go in the new year."

The data out today follows comments by Housing Minister Nick Smith on yesterday's realestate.co.nz and Quotable Value data, which appeared to contradict each other.
Smith said it was far too early to tell what was going on and it would be at least till February before any clear signals might emerge.

"The Government will be looking at a longer period of time. By about February next year, we will have a clearer idea of the measures and more reliable information on the scale of overseas buyers and have sufficient number of months, whether it's building consent or sales figures," Smith said yesterday.

Read the full Barfoot and Thompson release here: