Auckland House Prices Slump While Heat Still on in Smaller Centres

High New Zealand house prices put a lid on the traditional September bounce back, which means that salaries may have to catch up to house price growth before the property market can start booming again. QV statistics for September showed subdued prices around the country, which the property data firm said was probably due to house prices pushing the limits of what buyers could afford.

Auckland's average value did not move in the quarter, the first time this year there was no price fall. Values remain 1.9 per cent below where they were last year. QV general manager David Nagel said the main cities were all experiencing relatively subdued value growth. "Despite this, we are still seeing pockets within these locations that are thriving with reports of multiple offers on good quality affordable housing stock, indicating the buyers are still out there if it's the right property."

He said, in some places, prices were unlikely to rise much until there was a noticeable increase in incomes. "Affordability is counteracting any significant growth over the next 12 months, and it might take until we see some salary inflation to counteract the imbalance between what we get paid and what we have to spend to live."

"The Auckland residential market remains fairly quiet as we head into spring," said Auckland property consultant Hugh Robson. "Typically, we should see a slight to moderate increase in the number of listings over the next two to three months, as people wanting to sell place their properties on the market hoping for a sale before Christmas.

"In West Auckland, first home buyers continue to represent a good percentage of the sales occurring in the Waitakere area. These properties are generally in the $570,000 to $800,000 price range. We note there has been an increase in the number of properties being advertised with an asking price."

There was also a strong level of demand from first-home buyers in South Auckland, he said. "Historically, some pockets in South Auckland are predominantly investors driven but we have yet to notice a pickup of investor activities in those areas.

"Listings remain low, which is contributing to price pressure around much of the country. Even in Auckland, where listings have increased over the longer term, they're lower than at the same time last year and this has meant price pressure where demand is relatively high. This is generally in the least expensive areas which appeal to a number of buyer, first-home buyers and investors alike."

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