According to Barfoot & Thompson, the decline in Auckland residential property prices reflects the three-decade-high rate of inflation and the rising mortgage interest rates
The median and average sales prices in April fell back when compared to those in March and the previous three months, according to Barfoot & Thompson managing director Peter Thompson.
The monthly median price at $1,141,000 was a fall of 3.3 percent and the average price at $1,212,376 was a fall of 1.8 percent, Thompson said on Tuesday.
When compared to the average prices paid over the previous three months, the median price in April fell 1.7 percent and the average price fell 0.7 percent, he said.
According to the realtor, the decline in Auckland residential property prices reflects the three-decade-high rate of inflation and the rising mortgage interest rates imposed by the Reserve Bank to counter it.
Buyers are now showing a greater reluctance to meet vendor expectations, Thompson said.
Vendors who have an open mind as to the value of their property are the ones who are more likely to achieve a sale in the new environment into which the market is heading, he said.
The figures echo CoreLogic’s property market update last Wednesday, showing sales activity slowing.
House prices shot up by 30 percent in 2021, sparked in part by historically low interest rates imposed by the Reserve Bank at the start of COVID-19 to stimulate the economy, and tight housing supply.
Property value growth rates have now slowed, with the national average only up by 0.7 percent in March – the softest figure since values dropped by 0.2 percent two years ago in August 2020. The annual growth rate also dropped to 23.4 percent.
The common drivers of the widespread post-COVID upswing in property values – including low mortgage rates and tight supply – are no longer in play, CoreLogic chief property economist Kelvin Davidson said last week.
One of the driving factors is that housing supply is catching up. The last 12 months have been the busiest on record for new home consents, according to new figures from Stats NZ.
In the year ended March 2022, 50,858 new homes were consented, up 24 percent from the March 2021 year. In Auckland, 21,477 new homes were consented in the year ended March 2022, driven largely by an increase in multi-unit dwellings.
A total of 5303 new homes were consented in March alone.