Auckland house sales fall in November, too early to blame LVR’s, says Barfoot
Fewer Auckland houses are selling at auction, total sales were down 7.1 percent in November against October, and homes worth less than $500,000 are selling more slowly, says Auckland real estate agent Barfoot & Thompson.
However, managing director Peter Thompson says these trends are not enough to say the Reserve Bank's lending restrictions on highly leveraged borrowers are having an impact yet.
The average sale price for homes sold in Auckland rose by 3.2 percent from October's average, to $684,646, while the median price increased 5.3 percent to $621,400, in part reflecting the traditional tendency for higher priced homes to be listed for sale going into the summer months.
The firm sold 189 homes worth more than $1 million, but there was a drop in overall activity from October, when there appears to have been a rush to get property on the market ahead of the RBNZ's loan to value ratio lending restrictions.
The new rules are expected to hit first home buyers hardest by restricting to 10 percent the total volume of a bank's lending to borrowers with less than a 20 percent deposit on a house purchase.
"Sales numbers in November at 1118 were down 7.1 percent on the numbers for October. However, they were higher than the number sold in September, and also in line with the number sold in November last year," said Thompson.
"In terms of house values and turnover, November represented a solid month's trading with numbers and values unaffected by any changes that the trading banks imposed.
"This comes as no surprise as structural changes of the type being sought by the Reserve Bank can take many months to flow into the system. If change does occur, it is likely to be towards the end of the first quarter of 2014 before its influence is felt."
However, there had been a reduction in the number of homes sold at auction, with more sales occurring after auction in negotiations between buyers and sellers.
"This may well be a sign that buyers do not have the same flexibility as previously, and are looking to get confirmation from their bank before completing the purchase," Thompson said.
The 370 homes sold for under $500,000 during November was well down on 457 sold in October, although in line with September totals.
November new listing was also down 17.4 percent down on unusually high October listings.
Meanwhile, Statistics New Zealand reports that residential building activity grew strongly in the September quarter compared with the June quarter, particularly in Canterbury, with a seasonally adjusted 9 percent increase by value.
However, the rate of growth appears to be slowing, the department said.
Canterbury region activity was up 20 percent, while the increase in the value of residential building work across the rest of the country was up 6.2 percent on June quarter activity.
The value of non-residential building activity in Canterbury showed the same trend, up 22 percent, following a 14 percent fall in the June quarter.
Across the country, the volume of residential building activity rose 8.1 percent this quarter and non-residential building activity fell 6.4 percent, while overall building activity increased 1.4 percent.