Plenty of people watching the Auckland property market have been saying for some time that its run of ever-increasing values must end. And it looks like the market is, at last, starting to take a breather.
Monthly price increases have slowed, says real estate firm Barfoot & Thompson. Although the cause is uncertain, it may just be down to the time of year and a seasonal lack of new listings. Although Peter Thompson, managing director of the real estate firm, wonders if the market is close to being "fully priced". Is Auckland's house inflation about to hit its limit?
Certainly the Loan to Value Ratio, in which borrowers need a 20 per cent deposit to buy a home, isn't helping sellers.
Thompson says the average sale price achieved by the firm in June was only 0.5 per cent up on May's average. A stark contrast to the previous three months when prices increased on average by 3.2 per cent a month.
Annual property price increases, he says, have also dipped from the heady 20 per cent a year (May to May) to 15.7 per cent in the 12 months to June.
"While the new Government and Reserve Bank measures, which are due to come into effect in October, are likely to be having some impact on prices, as will the approach of winter, there is also a growing feeling among buyers and sellers that homes are close to being fully priced," says Thompson in a press release.
New homes
Two greenfield Special Housing Areas (SHAs) at McLarin Rd, Glenbrook, and Bremner Rd, Drury, have been added to the 84 SHAs in Auckland. They bring the total number of new homes planned for the Super City to 45,000.
The new sites will be used for around 1800 homes, including 150 affordable homes priced at $550,000 or less (although I wonder if that price will be correct when the properties come to market).
Interest rates
Mortgage hunters have never had it so good -- and there may be even better news as pressure mounts on the Reserve Bank to lower the official cash rate again.
Floating rates at the High Street banks sit at 6.50 per cent or less and may be reduced on July 23 if the RBNZ lowers the OCR from its current 3.25 per cent. Will we match Australia's two per cent OCR one day? I doubt it, but it could end up at 2.75 per cent by the year end.
The banks have access to money at well below the OCR rate, so could reduce floating rates today. However, the real deals are with fixed rate mortgages. Check out ANZ's two-year rate of 4.99 per cent, or the ASB's 4.89 per cent for one year. Do your research, shop around and haggle to get the best rate.
This week's podcast:bit.ly/1L7EGy8