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Significant slowdown in Auckland housing market

The latest sales figures for Auckland house prices look good on the surface, but are in reality not that flash.

Tuesday, January 8th 2008, 12:00AM

by The Landlord

Real estate firm Barfoot and Thompson said yesterday, that average house prices were up 12% during 2007, from $480,738 to $538,478.

However sales volumes are down 36.3% on a annual, seasonally adjusted basis and down 17.6% month-on-month, sharebroker Goldman Sachs JB Were (GSJBW) says.

Adding to the gloomy picture inventory levels, that is the number of houses for sale are up from 6.2 months supply to 6.4 months. "The rapid accumulation of inventory from around four months' supply in March 2007 to 6.4 months in December suggests that current prices remain too high to clear the volume of unsold homes.

The pressure on house prices is to the downside to restore some semblance of affordability in the market."

GSJBW says "December house sales were down sharply, but large seasonal variations can sometimes be overcompensated in the seasonal adjustment process. Nevertheless the evidence of a sharp slowdown in the housing market is inescapable; December house sales volumes (unadjusted) were down 36.6% year-on-year"

It says the slowdown in house sales has been across all price categories, although the sharpest slowing has been in the sub $500,000 category. "While some of the decline in sales volumes in this category has been due to category shifting (as prices have increased), we believe the underlying cause for the housing slowdown is high mortgage rates, slowing net migration and a generally slowing economy."

GSJBW says the Barfoot data is a good indicator of what is happening in the market and that a fuller picture will emerge next year when the Real Estate Institute release its latest data.

« Property investors refocus on cash flowAuckland house prices rise 12% in 2007 »

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ANZ 5.19 4.05 4.05 4.49
ANZ Special - 3.55 3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.55 3.89
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BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
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China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
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Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 3.97 4.05 4.39
Kiwibank ▼5.15 4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 ▼4.45 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 ▲3.55 3.89
Sovereign 5.30 3.89 4.05 4.39
Sovereign Special - 3.39 3.55 3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.19 4.35 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.39 3.55 3.89
Wairarapa Building Society ▼5.50 ▼3.95 ▼4.05 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.55 3.99
Median 5.34 3.97 4.05 4.39

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