Auckland housing market activity picks up in May, prices weaken

Construction of apartments and completed apartments in Hobosonville, Auckland. Photo: John Sefton

Activity picked up across the Auckland residential property market in May although prices were weaker, according to the city's largest realtor.

The average sale price for May slipped 1.3 percent from April to a five-month low of $918,465 and was 2.6 percent below May last year, Auckland realtor Barfoot & Thompson said in a statement. The median price declined 1.2 percent from April to a three-month low of $820,000 and was 3.1 percent below May last year. Sales volumes rose 41 percent from April to 1,027 and were 16 percent ahead of May last year.

There were 1,455 new listings during the month, up 7.1 percent from April although 16 percent below May last year. The higher sales volumes meant the realtor had 4,568 properties available for sale at the end of the month, down 2.4 percent on April but 6.3 percent higher than May last year.

The heated housing market in New Zealand's largest city has shown signs of cooling after Reserve Bank restrictions on more highly-leveraged mortgage lending and government policies to restrict the sale of homes and property to residential investors. May is the second consecutive month that sales numbers have exceeded their equivalents in 2017, which the realtor said shows the market is coming out of its 12-month hibernation.

“The handbrake that was holding back buyers eased in May, and it led to high sales volumes across all price bands,” Barfoot & Thompson managing director Peter Thompson said in a statement. "At current levels, buyers are demonstrating confidence that prices have likely bottomed and vendors are recognising the market is not going to rebound to levels higher than those of 12 to 18 months ago. As we head into the winter months prices are now on a par with what they were this time 12 months ago, and we can expect price stability for the remaining winter months."

Barfoot said sales in the under $500,000 price band were "particularly strong" in May, with the 157 sales representing 15.5 percent of all May sales and more than double the number sold in April. Sales in the top $2 million plus and $1 million plus price bands were also strong, with the sales for these properties accounting for a third of all sales, the realtor said.

In the rural and lifestyle category, high-end properties continued to be in demand to the north and south of Auckland, with sales at auction, or by negotiation shortly after the auction, remaining the most effective sales method, it said.