Why Auckland housing market stalled: Harcourts boss explains

There's been a 43.5 per cent increase in the volume of unsold Auckland properties. Photo / Doug Sherring

The new property speculators' tax, lending restrictions and the general election are all hitting the Auckland house sales market hard, according to the boss of the country's largest real estate chains.

Chris Kennedy, chief executive of Harcourts, has cited these factors as reasons for a 43.5 per cent annual increase in the volume of unsold Auckland properties listed with his business.

Kennedy has just released data showing a leap in the volume of Auckland property on hand between July last year and last month, from 1194 unsold properties last year to 1714 properties last month.

"Investment has fallen off due to the Inland Revenue Department's introduction of the bright-line rule, the Reserve Bank's loan to value restrictions and foreign investors facing a more difficult task in transferring money out of their countries," said Harcourt's latest Market Watch.

The bright line rule means anyone selling a residential investment property within two years of buying must pay the full applicable tax rate.

Kennedy said politics had also affected the market.

"It's also election time and there is always a drop in the number of new listings and sales in the weeks leading up to an election," he said.

Yet prices continue to rise.

The average sales price jumped from $996,504 last July to $1,009,090 last month.

The number of Auckland auctions fell 56.9 per cent between July last year and July this year: 347 Harcourts auctions were held then compared to 149 last month.

Listings fell 25 per cent, from 631 last July to 472 last month and written sales declined 19 per cent, from 515 sales last July to 417 sales last month.

The Harcourts data is in line with other figures out lately. On Friday, the Real Estate Institute said sales volumes had collapsed by a quarter in the past year, prompting it to call for an end to the Reserve Bank's stringent lending restrictions for first-time buyers. National house sale volumes fell 24.5 per cent last month compared to July last year, REINZ said.

QV said on August 1 that Auckland residential property values rose only 5.3 per cent in the past year, the slowest annual rate of growth since May 2012.

Barfoot & Thompson's July data also showed dropping Auckland and Northland sales volumes. There were just 747 unconditional sales last month with commissions paid, down on the 855 in June and the 886 in May. The average residential sales price fell from $913,606 in June to $908,319 in July, Barfoot said.