Housing market eases as election race heats up

Photo / Mark Mitchell

Agencies say decline in figures will be arrested post poll.

The number of house sales are easing in Auckland, with some real estate agents citing uncertainty around the upcoming election as a key factor in the decline.

Barfoot & Thompson announced its August figures yesterday, and revealed a total of 909 sales for the month - 7.5 per cent less than in July.

"August was a quiet month in terms of activity," managing director Peter Thompson said. "This is not unexpected as the market invariably goes quiet in the build-up to the general elections.

"Buying or selling a house represents a major financial decision, and without certainty people put that decision on hold. Certainty will return post the election, and the final three months of the year are likely to see greater activity than normal as the regular five-month spring/summer pre-Christmas season is compressed into three months of trading."

Figures from the lead-up to the 2011 general election, which was held on November 26, show the agency's Auckland housing sales remained relatively steady - with 727 house sales recorded for October that year, down slightly from 738 in September.

New listings with the agency from the period actually increased, up 4 per cent from 1263 in September to 1314 in October 2011.

Bayleys, which released a 3-month analysis of the Auckland residential market recently, said a drop in sales around the general election was expected.

"Annually, residential sales volumes drop throughout the winter period," managing director Mike Bayley said.

"Compounding that, every three years the pace of sales also decreases in the 12 weeks leading up to a general election.

"This year, the market has also been restrained by two fiscal factors - rising mortgage interest rates for the first time in some four years, and the effect of the loan-to-value lending criteria imposed by the banks."

Figures from the Real Estate Institute of New Zealand - which records all sales - were not yet available for last month's housing deals in Auckland.

However, institute figures from 2011 show the number of sales in Auckland dropped 4.7 per cent in the two months before the November general election - from 1922 in September to 1832 in October.

Nationally, the number of house sales dropped 4.4 per cent between September and October that year.

- additional reporting Anne Gibson