Auckland high-value house sales surprise

MICHAEL FOREMAN
Last updated 13:59 03/07/2014

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Winter has dampened the Auckland property market, but prices still rose last month, figures from Barfoot & Thompson show.

The average sales price during June was $714,054, up 1.6 per cent on May's average price, the Auckland-based real estate company said.

While the company's sales of 1037 properties in June were 6.5 per cent lower than May, 179 of those homes sold for more than $1 million.

Barfoot & Thompson chief executive Wendy Alexander said the demand for higher-value properties had pushed the average price up by $11,000 in a month and the average price was now 9.9 per cent higher than a year ago.

"Even six months ago, sales of this number of high-value homes would have been exceptional," Alexander said.

"What this underlines is that while supply continues to lag behind demand, values for high-end homes will climb."

Barfoot & Thompson recorded 1149 new listings in June, down 12.8 per cent on May and its lowest number of new listings this year. A total of 3274 properties were listed at the end of June, the firm's lowest number for five months.

"Compared to the number of properties available at this time of year over the past 10 years, choice remains very limited," Alexander said.

ASB economist Daniel Smith said Barfoot & Thompson's sales had increased for the second month in a row in seasonally adjusted terms, suggesting that the drop-off in housing market activity had come to an end for now.

While sales volumes were still below the level seen before the Reserve Bank's low-deposit restrictions came into effect in October, they did not appear to be falling any further, Smith said.

Picking the direction of the housing market over the coming year or two was difficult, Smith said.

"On one side of the equation we have the LVR restrictions and rising interest rates," he said.

"But on the other we have very strong migration inflows, particularly in Auckland, and a level of supply that has risen only marginally since mid-2013."

Smith said that on balance, he expected house prices to continue rising in the Auckland and Canterbury regions, but not at the pace seen over 2012-13.

Westpac Institutional Bank economist Felix Delbruck said that in seasonally adjusted terms Barfoot & Thompson's sales had risen for two consecutive months but its sales were still 16 per cent below their August 2013 peak.

Barfoot's stock of unsold listings also remained about 10 per cent higher than in August last year, though it had now started to level off, Delbruck said.

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