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Auckland house sales plunge 24% in April as interest rates rise, loan restrictions weigh

Auckland house sales dropped by almost a quarter in April from a year earlier as rising interest rates and restrictions on low-deposit mortgage lending weigh on demand, according to Barfoot & Thompson, the city's biggest realtor.

Sales dropped to 811 in April from 1,062 a year earlier, and were down from 1,392 in March. The average sale price dropped to $708,603 from $725,708 in March, but was still up from $643,089 in 2013. The median sale price fell to $619,550 from $652,000 in March, and was up from $566,000 in 2013. Listings increased to 3,623 in April from 3,570 in March, and were up from 3,467 a year earlier.

"It shows ongoing support in the Auckland property market, but more listings creates more choice, and that ultimately softens prices," Barfoot & Thompson managing director Peter Thompson said in a statement. "Undoubtedly the loan-to-value ratio and interest rates were also keeping prices in check."

Auckland's property market has been a bugbear for the Reserve Bank as prices accelerated in the face of a supply shortage, and prompted the introduction of restrictions on low-equity home lending as a means to cool the sector.

The restrictions have had a greater impact on first-home buyers and caused a drop-off in cheaper housing.

Barfoot said about 37 percent of sales were below $500,000, and sales of $1 million homes rose to 120 from 103 a year earlier.


Comments and questions

Great news for now, but won't stop the supply constraints. We need some fast-tracking of RMA and other building consents in order to have any meaningful effect on pricing.

I think your head line has rushed to judgment prematurely. The "plunge" in sales often happens in April (especially this year) with the combination of school holidays, Easter and Anzac day taking big chunks of marketing days out of the equation. People tend not to list, or suspend buying during these times.

24% drop is April verses April so ANZAC day etc not the driving force. Not sure if Easter was in April last year or not. If not thay might have had an impact.

It's pretty easy to adjust - the total of March and APril this year is still down more than 12% from March and April last year. The market is going down.

Good news indeed. All we need now is for the government to stop the ethnic cleansing of Auckland by China and we might get some market driven house prices.

Now time to shut the immigration flood gates and prices should start returning to planet earth

Or, keep immigration flowing to grow the economy, and build some new houses.

And magically grow some infrastructure to support the rapid increase in Auckland's population. It won't happen. Auckland will become more uncomfortable to live in than it already is.

Well what do you know! The market still goes up and down just like it has since time began. I hope someone tells Labour so they can drop the rate of kiwisaver contributions before they even get around to introducing their silly scheme..