released last week
showed the Auckland market as a mixed picture and the latest data from Harcourts indicate it has cooled in the past month.
The number of properties available to buy overall as increased, up nearly 40% on the same time last year, sales have dropped by 18.6% and average prices are fell slightly by 1.1% compared to February 2016, according to a February market watch update.
Harcourts CEO Chris Kennedy says the drop in sales are partly due to a fall away in the number of 700 property investors, following the tougher loan to value ratios that came into play last November.
Although the figures indicate a cooling, Kennedy told NZ Adviser
that it remains a strong market.
“To say it is cooling is one thing - I think at the end of the day if you put it in perspective, the average sale price has only shifted $10,800.
Referring to market growth of 12% last year, Kennedy expects this year growth will be around 3-6%.
“We’re back to what I would call a really good solid market of 2014/15, that’s where I think the market is.
Although stock has increased, giving more choice to buyers Kennedy said he doesn’t think that it will change values as high positive net migration, low interest rates, good business confidence and housing shortage are still factors to contend with.
“The LVR restrictions are starting to take an effect - they are having the desired effect that the Reserve Bank wanted but at the end of the day I’m not sure that they are going to stop the market,” he said. believing DTI restrictions will become inevitable
REINZ CEO Bindi Norwell previously told NZ Adviser
a debt-to-income tool being wielded by the Reserve bank would be unlikely to occur in 2017 with it being an election year and also that further analysis was needed.
Kennedy agreed that there will need to be more analysis but believes the introduction of DTI restrictions is definitely going to happen as the Reserve Bank turns to new ways of taking the heat out of the market.
“I think it’s inevitable that at some stage if our markets keep going the way they are that they will endeavour to introduce it, whether that’s this year or next year, I think we’ll see it at some stage.
“Because there’s nothing abating the growth strategy for Auckland,” he said. “We want be called the super city, we’ve got to start to behave like a super-city and we’ve got to start to build an infrastructure of a super city. But we’re actually in catch up mode.
“We’re a big New Zealand city but we’re a small international city - but with that we’re very much an international destination,” Kennedy said, referring to the net gain of 71,305 migrants in the 12 months to January, of which 65,000 chose Auckland as their new home," he told NZ Adviser
“Phil Goff’s got his housing think-tank going and I applaud him for that but let’s hope we can see some change out of that and see some initiative going forward, because if he can then he’s going to solve a big problem and it’ll be very good for this city.”
Figures from the Real Estate Institute of New Zealand (REINZ)