The trend in constantly rising property prices in Auckland came to an abrupt halt in August, ending a six-month run.
Peter Thompson, managing director of real estate firm Barfoot & Thompson, says the average price of a home in the Super City dropped by $6000 to $821,079 last month. The median figure, a more accurate reflection of prices, was $755,000 - down $2000 on July.
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Thompson says there were signs house price increases were cooling in June and July, and that August saw a small decline in prices.
"Caution is needed when comparing August's year-on-year price increase, which is 15.4 per cent," says Thompson. "Most of this increase occurred in the first four months of the year, and for the past three months house prices have been stable.
"Prices are now at the crossroads with the most likely scenario being that prices will increase modestly in coming months.
"Factors which have led to record prices being achieved still remain. However, countering this are new Reserve Bank and Government regulations and rules, and concerns around worldwide economic stability."
Sales numbers at the firm during August were 1314, more than 44 per cent above August last year. And the number of homes being listed for sale is climbing. Barfoot added 2123 properties to its book during August, the highest number in any month for the agency in more than 10 years.
In a fix
Floating rates are still too high, with banks charging 6.24-plus per cent for money most likely borrowed from the international markets at 1 per cent (how do you think they can offer such low fixed-rate mortgages while making huge profits?).
And talking of fixed rates, the deals are getting better and better. A few months back a friend asked if he should fix at 5.50 per cent. I recommended he hold off for a month or two as there was plenty of talk of rates coming down - and down they have come.
HSBC, SBS, TSB and Bank Direct are among those offering an 18-month rate of 4.69. However, BNZ and ASB have by far the lowest rate at the time of writing, 4.35 per cent for one year.
Although the rate is exceptional, one wonders where rates will be in 12 months. If they start shooting up late next year, then any gains made with the one-year rate might be lost.
But this week ASB announced a four-year rate of 4.99 per cent and a five-year rate of 5.09 per cent.
Expect other High St banks to follow suit as they each vie to increase market share with exceptional rates.