Auckland house prices rose 2 per cent last month, pushing the price record out to $1.07 million.

Barfoot & Thompson today released its May sales data, saying the market “shows no hint that restrictions imposed in March have had an impact on prices or sales numbers.”

The agency was referring to anti-investor moves, removing what Finance Minister Grant Robertson termed tax “loopholes” – interest deductibility on mortgages for investment properties – as well as doubling the brightline test’s time period from five to 10 years.

“May’s trading was excellent, with the median price increasing, the average price being in line with the record price set in April and sales numbers being their highest in the month of May for four years,” the agency said.

“The market has worked through the implications of the recent changes and buyers continue to trade with confidence.

The median May price at $1,073,000 was up 2.2 per cent on April, setting a new record median price 17.4 per cent ahead of last year’s May price.

The average price for the month was $1,114,011.

Sale activity usually eases in winter and the agency fully expects that but warned against
people concluding it was due to Government changes.

“The cause is likely to be seasonal rather than investors reacting to the removal of interest payments as a tax deduction and the extension of the bright line test,” it said.

Sales at 1197 for May were 8.1 per cent ahead of April and comfortably higher than in the pre-Covid sales numbers for the same month between 2017 and 2019.

Although new listings in the month at 1502 were their highest in a May for four years it did nothing to improve availability.

At month end, the agency had 3122 properties on our books – the lowestsince January and May’s lowest for five years.

The agency sold 110 properties sold for$2m+ in May, the third consecutive month when sales exceeding $2 million have been above 100.

· Sales of property for less than $750,000, at 179, represented 15 per cent of all sales.

Rural and lifestyle property sales also remained unaffected by the new regulations with sales in this sector reaching $95 million, the highest May sales turnover for five years.

Sales around Kumeu were particularly strong following a lift in new listings while buyer demand for property in the $2 to $3 million price range in Rodney was greater than available listings.

The Far North continues to attract high interest, particularly for 10 to 25ha bush blocks with streams.

Today, findings of the latest REINZ & Tony Alexander Real Estate Survey were released.

That showed sharp declines in most measures of market activity following the reimposition of loan to value ratio rules and Government changes announced on March 23 discouraging investors from buying.

More first-home buyers were taking a step back from the market, the survey found.

“There is still FOMO and agents still overwhelmingly feel that prices are rising in their location. But interest from offshore continues to decline, investors are still in a wait-and-see mode, and buyers still remain concerned about a shortage of listings,” REINZ said.

“The proportion of agents feeling that more investors are coming forward to sell their properties has decreased over the month.”

Many people could “simply take a breather after the frenzy between August and March”, REINZ said.

ASB today noted how new consent numbers climbed 4.8 per cent in April, with the annual issuance at 42,848 hitting a new record high.

Intense capacity constraints in the construction sector and solid demand will likely weigh on activity and underpin further price increases in the sector, economists there said.

“With the construction sector the canary in the inflation coalmine, this points to inflation remaining higher than the RBNZ would have hoped for. We expect annual CPI inflation to end 2021 at around 3 per cent. Core Logic house prices- which tend to provide lagging rather than leading information – showed annual house price inflation travelling at a robust 20.5 per cent annual clip in May,” ASB said today.

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