January house prices slip from December's record in holiday lull

Auckland house prices edged lower in January from record levels the previous month as sales volumes steadied during the summer holiday period, according to the city's largest real estate agency.

The average sale price slipped 0.2 percent to $757,319 in January from December, although it was 17 percent ahead of January last year, Auckland real estate agency Barfoot & Thompson said in a statement. The median price declined 2.8 percent to $700,000 from December's record, to be 21 percent above January last year, it said.

The housing market in New Zealand's largest city remains firm amid record migration and a shortage of supply. While sales volumes slipped 18 percent from December to 859, the number of properties changing hands was in line with January months for the past two years, the agency said.

"A drop off in the average price between December and January is normal as the market gradually builds new momentum after the holiday break, but this year properties held on to their high December values," said Barfoot & Thompson managing director Peter Thompson. "Based on January's combination of solid sales numbers with continuing high prices, it suggests market values are likely to continue to hold firm or edge up modestly during the first half of this year."

New Zealand's Reserve Bank is keeping a watchful eye on the housing market amid concerns the prospect of lower interest rates could cause it to overheat and cause financial instability. Reserve Bank governor Graeme Wheeler last week dropped his bias for higher interest rates and said they could move either up or down in the future.

Some economists expect Wheeler to announce further measures to dampen the property market at his speech in Christchurch today, after he introduced limits on high debt mortgage lending in October 2013. Those limits have curbed sales of lower priced homes typically bought by first-home buyers with less equity.

In January, 21 percent of homes sold for $1 million or more, up from 17 percent in December and 11 percent in January last year, Barfoot & Thompson said.

The agency had 2,899 properties on its books at the end of January, a 16 percent increase from the month earlier but 14 percent lower than January 2014.

New listings jumped 86 percent from December to 1,199 but were 2.5 percent lower than the same period a year earlier, the agency said.

(BusinessDesk)