LVR effects begin to show
Westpac says a fall in Auckland house sales between October and November at the city's biggest real estate agency is a sign that the Reserve Bank's clampdown on low-equity mortgages is slowing the market.
Barfoot & Thompson had a record month for million-dollar house sales, but its overall turnover slipped 7.1 per cent on the previous month.
Year on year, sales edged down 0.5 per cent.
House prices were unaffected, with the average sale price at the agency rising 3.2 per cent on the previous month to $684,646.
But Barfoot & Thompson managing director Peter Thompson disagreed with Westpac, saying the comparison was being made with an unusually strong October, as buyers rushed to get their sales through ahead of the changes.
He said November's sales figures were more in line with previous months.
"If the Reserve Bank restrictions on mortgage lending are to have an impact on the Auckland housing market, they are yet to show up in housing activity or sales prices," he said.
However, Westpac economist Michael Gordon said the fall in sales met his expectations that the Reserve Bank's loan-to-value ratio (LVR) restrictions would start to be felt in November.
Gordon agreed October had been a particularly strong month, but said it was noteworthy that November sales compared to a year ago had also started to decline.
"That's the first time they've been down year on year since February 2011," Gordon said.
"That in itself sounds like a significant turn in the market.
"This is from one agency and one city. I wouldn't extrapolate this to what the nationwide market's done but I think the point is, we were looking to see some slowing in November and the numbers support that."
Over time, he expected the effect of the LVR changes would be milder.
"Houses will continue to sell, but they will take longer, as those buyers who are able to get a high-LVR loan or muster up a large enough deposit will be more opportunistic," he said.
Both Barfoot and Westpac said the effect on house prices were lagged and they did not expect any slide in prices until early next year.
One area Thompson did think was showing the effect of the LVR changes was auctions. Sales were beginning to fall through under the hammer, although they usually went through later.
"This may well be a sign that buyers do not have the same flexibility as previously, and are looking to get confirmation from their bank before completing the purchase," he said.
Gordon said another area affected by the LVR changes was a sharp drop in Barfoot's new listings, down 17.7 per cent.
This suggested vendors had been reluctant to sell in a more uncertain market, he said.