Winter lull holds Auckland house prices
Chronically low listings are putting the clamps on Auckland's soaring house prices, according to the city's biggest real estate agency.
For the third consecutive month, Barfoot & Thompson's average Auckland house price showed little movement in June. The average price reached $649,945, a seasonally adjusted 1.8 per cent higher than May.
But Barfoot's managing director Peter Thompson said the price was still only marginally higher since March, a little over $4000.
That view was not shared by Westpac economist Michael Gordon who said house sales were following the usual early winter downturn and that 1.8 per cent was still a steady increase for a month.
He warned against reading too much into monthly figures.
"The bottom line is you've got prices up more than 10 per cent on the same time last year. That doesn't seem to me like the trend is slowing.
"It still feels like a market where demand is outstripping supply and prices are still going up."
However, both Westpac and Thompson agreed that sales were being constrained by a record low in the number of houses on the Auckland market.
Barfoot's sales dropped 3 per cent in June, after two flat months, reflecting industry figures that showed Auckland's property inventory had dropped to an all-time low.
Barfoot's available listings in June were down 30 per cent on the previous year, and new listings were down 4.5 per cent.
The number of properties on its books at the end of the month dipped below 3000 for the first time in 11 years.
However, Thompson said demand was still "unprecedented," and homes that were on the market were "selling within a tighter time frame than at any time in the last decade".
In his opinion, the high prices were failing to draw out more vendors because of a genuine lack of supply, the normal winter drop-off, and concerns about finding another house.
"Some people are possibly hesitant to list their property, even though they want to, because they're not sure what they're going to be able to buy at the other end," he said.
Gordon agreed, saying investors with more than one property might also be holding back, in hopes of better prices. This explained why there was no shortage of rentals in Auckland.
"I suspect there's an element of hoarding going on maybe because there's a fear that Auckland's housing supply issues won't ever get resolved."
Westpac expects national house prices to rise 9.5 per cent this year and a further 7.5 per cent next year unless the Reserve Bank raises interest rates.