Market cools but Auckland house prices still high

The Auckland market is cooling but prices remain prohibitively expensive. Photo / File

House sales continue to trend downward in Auckland with a 13 per cent drop on the previous year but despite a higher availability of houses to buy, prices are remaining consistent.

Available property stock has increased by 45.9 per cent compared with March 2016, according to data from Harcourts' Auckland Market Watch. While lower sales and higher availability signals a cooling market, house prices are slightly up from last year with the average Auckland house selling for $986,157.

"After several years of rapid growth, the market has slowed and sales are not as easy as they once were," said Harcourts chief executive Chris Kennedy.

"This requires a mindset readjustment, both in members of the public and also those of us in the real estate industry," he said.

"From my perspective, the slowing market is down to a number of factors, including a fall in the number of property investors in the wake of the tougher loan to value ratio restrictions introduced in November. Banks are also starting to raise interest rates and we're likely to see the Reserve Bank adjust the OCR."

However, Kennedy warns record migration to Auckland could prolong a high demand for housing.

"The market has cooled a little, which means houses may take longer to sell. But what we are not going to see is a big drop in values," Kennedy said.