December 2017 housing market update

Auckland house prices reined in but still rising

The average selling price of Auckland homes continued to rise in 2017 but prices also recorded their lowest price increase across a calendar year for five years.

“While prices have continued to rise, the Auckland market has been reined in from rapid price increases and has settled into a more stable trading environment,” said Peter Thompson, Managing Director of Barfoot & Thompson.

“In 2017 the average selling price increased by 4.5 percent to $926,632 and the median selling price by 2.7 percent to $843,583.

“What did change significantly in 2017 was the number of homes sold, which fell by more than a quarter on the numbers sold in each of the previous three years. 

“The sense of urgency to buy a property regardless of its asking price has disappeared.

“It has been replaced by buyers taking a more considered approach.

“Normally when sale numbers fall by such a large percentage, prices retreat from their record high levels.

“But this has not occurred, and prices have continued to rise modestly.

“It underlines there is still buyer support at current prices.

“In part, this was aided by the recent release of new capital values by the Council as sellers and buyers have the same information as to the potential value of a property.

“In December we sold 674 homes, a number in line with the number we sold each month for the previous three months.

“However, the average sales price for December at $939,871 was 2.6 percent higher than the average for the previous three months and the fourth highest on record.

“The median price in December at $870,000 was 3.6 percent higher than that for the previous three months and the second highest on record.

“Undoubtedly, the measures progressively introduced by the Reserve Bank, a more prudent approach to mortgage lending by the trading banks and a growing apprehension among buyers as to the prices being paid all played their part in cooling the market.

“At the same time, a housing shortage when the population is growing creates demand. 

“New listings in December at 571 were low, but for calendar 2017 the average number of listings each month was 1510, the third highest on record.

“At the end of the year we had 4160 listings on our books, a quarter higher than at the same time last year while across the year average available listings on a monthly basis at 4229, have been at their highest for five years.

“The growing value of Auckland’s housing stock is reflected in the changing percentages between property selling for under $500,000 and those for in excess of $1 million.

“In 2017 8.9 percent of all homes sold were for less than $500,000. In 2016 the comparative percentage was 11.1 percent and in 2015 14.9 percent. 

“In 2017 37 percent of all homes sold were for in excess of $1 million. The comparative figure in 2016 was 35.4 percent and in 2015 29.1 percent.

“Lifestyle and rural property sales in 2017 in the Auckland and Northland regions followed the same pattern as for Auckland residential sales. Sales numbers fell in comparison with those in 2016 and 2015 but were still firm, while prices for good quality properties held steady.

“Dairy farm sales in the north also had to contend with a downturn in the dairy economy, which affected activity. 

“Lifestyle living retained its attraction for many and inquiries remained strong throughout the year.”