Shortage of properties push up prices in Auckland, New Zealand

Property prices in Auckland have increased to an all time average high

A shortage of properties for sale in Auckland, New Zealand, is pushing up home prices with leading agent Barfoot & Thompson reporting the highest number of June sales for five years.

Prices have increased to an all time average high of $589,251 and last month the average price increased by 1.2% compared with prices in May, some 8.5% higher than the average sales price for the whole of 2011.

‘In June we sold 994 properties, the highest number of homes we have sold in June for five years, and at the end of the month we had only 4,078 listings on our books, the lowest number for nearly seven years,’ said Wendy Alexander, chief executive officer, Barfoot & Thompson.

Another indicator that in 2012 prices have risen across Auckland is that in June nearly seven homes in 10 sold for more than $500,000, whereas last June it was under six in 10.

‘While the market is active and prices are at an all time high, properties that are selling way in excess of valuation remain the exception. For most properties, prices are edging up, and the average sales price in June was 3.2% above the average price in March, which is a modest increase over the three months given the tight supply of properties,’ explained Alexander.

‘Buyers are measured as to what they are prepared to pay, even though mortgage rates are low and the banks’ mortgage lending criteria are competitive,’ she added.

New listings in June at 1,245 were ‘solid’ and in line with expectations for the middle months of the year but were insufficient to satisfy significant buyer demand.

‘The number of homes being listed in recent months is in line with normal trading patterns over the past few years. What has changed is an increase in the number of buyers, and they are creating a demand that was not there 12 to 18 months ago,’ Alexander pointed out.

‘This increase is coming from a combination of people moving from renting to buying and growth in Auckland’s population. At the end of June we had 19.5% fewer properties on our books than in June last year and 14.4% less than at the start of the year. Demand is outstripping the availability of property,’ she added.

During the month Barfoot & Thompson sold 84 homes for in excess of $1 million.

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