Auckland's biggest real estate agency says the city's housing market is "edging towards a price decline" for the first time in a decade, with prices falling in the last year.
Auckland's housing market could produce more "soft data" after the city's largest agency revealed an annual price decline for the first time in a decade, an economist says.
Kim Mundy of ASB said today Barfoot & Thompson's December 2018 sales of 504 properties based on unconditional and commission-paid deals was the lowest since 2008 when just 461 sales were made in December.
Kim Mundy of ASB. Photo / Supplied
Every December since 2008, sales have been much higher, reaching 920 in 2012, Barfoot numbers showed and she issued a prediction about this year.
Mundy said the Barfoot & Thompson figures out today highlighted "a very soft end to 2018 for the Auckland housing market. We are expecting to see more soft data results over 2019."
She was commenting after Barfoot & Thompson said the median Auckland house price last year fell by 0.8 per cent to $836,792 from $843,583 a year earlier.
"For the first time in a decade the Auckland residential property market is edging towards a price decline," the agency said.
Mundy noted new listings fell in December, the third consecutive decline, from 2046 in October to 1606 in November and just 555 in December. New listings in January last year were a plentiful 1200, climbing to 1747 by February.
"New house listings also contracted in December, suggesting that sellers are still taking a cautious approach to the housing market," she said.
She said there were a slightly lower number of working days in December last year, compared to the previous two years. Excluding Christmas Eve, there were only 15 working days last month compared to 16 in December 2017 and 17 working days in December, 2016.
Fewer working days can also affect market activity.
"The rebalancing in the Auckland housing market is expected to continue into 2019, with higher inventory levels giving prospective buyers the luxury of both time and choice," Mundy said.
Sales activity was expected to remain muted heading into the new year, she said.
Tax changes and the ban on foreign buyer would affect demand.
But positives included population growth, easing LVR restrictions and still-low interest rates, she said.
"These supports are likely to limit any further price falls we may see in the Auckland housing market over 2019," she said.
Other economists expressed concerns about the market before Christmas.
Other economists have warned of major factors that could influence New Zealand's housing market this year: the foreign buyer ban, the possibility of the Government axing landlords' tax deductions and the introduction of a capital gains tax.
Barfoot's latest data showed price falls. Photo / Richard Robinson
Economists at Westpac and ANZ both cite those three factors that could impact the sector and even the head of Auckland's largest real estate agency is talking of the possibility of a "slight correction".
Meanwhile, Tony Boyte, research director at Nielsen said data showed more Aucklanders intend to buy homes.
"We've seen an increase in Aucklanders' intention to buy property in the future. The latest Nielsen data, 124,000 Aucklanders said they intend to buy a property in the next 12 months, either to live in or as an investment property. Compared to the previous year, this number was 100,900 people, a 23 per cent increase," Boyte said.
Real Estate Institute figures for the national housing market are due out next week.
