Auckland property prices hit soft spot


Price rises hit soft spot

You may be surprised to hear that house prices are still rising across New Zealand. According to the Real Estate Institute — a member organisation for real estate agents — national median house prices increased 6.7 per cent to $540,000 in the year to May 2017. Seasonally adjusted, this increase is 6.2 per cent.

The institute’s CEO, Bindi Norwell, says: “May’s housing activity clearly shows continued buoyant activity across a number of regions which contrasts with the continuing stability of the Auckland region.”

Of course “stability” is estate agent parlance for no change, despite signs that Auckland properties are now being advertised with a price and some   with reduced prices. It’s getting chilly in the SuperCity.

Nevertheless, Norwell says: “Auckland median house prices increased 5 per cent year-on-year to $865,000, showing continued growth in the Auckland housing market, albeit at a slower rate than the previous year.”

Compared to April  median prices increased 1.6 per cent but  sales activity is slowing, with sales volumes having dropped  year-on-year   in Auckland by a massive 27.5 per cent and nationally sales are down by 18.4 per cent.

The institute also reports that the number of dwellings sold at auction continues to drop across the country, with 956 properties selling  under the hammer  in May (it was 1982 in May last year) — that’s a decrease of 52 per cent.
The median days to sell nationally increased by five to 37 days, compared to 32 days in May 2016.

Sales are down

Sales are down across the country by almost 15 per cent compared to this time last year, demonstrating Auckland’s cooling property market is spreading, says Chris Kennedy, CEO of Harcourts.

“Average prices are also starting to be affected by declining sales. In Auckland prices are down compared to 12 months ago for the first time since sales started declining late last year,” he says.

The average house in Auckland now sells for $947,809, well below the $1m benchmark that was set in April, and down 0.6 per cent compared to May 2016.

Housing row

Chris Barfoot, a former director of realtor Barfoot & Thompson, is against Government plans to remove public consultation over the sale of land at the Point England Reserve, Maungakiekie, for housing. The Government has earmarked the land for 300 homes.

“It appears the zeal of Minister [Nick] Smith has convinced Cabinet that building on reserves is the only way to solve the housing crisis and anyone who opposes this policy is adding to the crisis, including local people who protest at the loss of a significant part of their favourite park which provides both active and passive recreation,” says Barfoot.

“It is claimed the houses will be affordable, but market level is expected to be around the $1 million mark per house and there is no provision in the bill for any social or affordable houses.

“The future city of Tamaki has a projected population of 60,000 but will have no major passive recreation reserve, no place where one can get away from it all, no Cornwall Park. This will all be lost, for the sake of 300 houses.”