Auckland house prices fall in October - REINZ

Auckland's median house price slipped 3 percent in October from September, and the volume of sales dropped 19 percent. Photo / NZ Herald

The Auckland housing market slowed last month following the introduction of new restrictions, according to the latest industry figures.

The city's median price slipped 3 percent to $748,250 in October from September, and the volume of sales dropped 19 percent to 2,546, the Real Estate Institute of New Zealand said in a statement. Auckland houses took an average 31 days to sell in October, up from 29 days in September although unchanged from October last year.

For the year to October, the median Auckland house price rose 16.8 percent, compared with a 25.4 percent rise in the year to September, as measured by the statistics most closely watched by the Reserve Bank of New Zealand.

Concern about inflated prices in Auckland's property market, where migrants and investors are adding to competition for a shortage of housing stock, prompted the government and the Reserve Bank to introduce new measures to quell the risk from a housing bubble. The central bank introduced Auckland-specific lending restrictions this month, while the government's more stringent enforcement of taxing speculators' capital gains began last month.

"The drop in the number of sales in Auckland in October is the result of a softening of demand over the past few months and the new IRD and bank account rules introduced at the start of October," institute chief executive Colleen Milne said in the report. "However, the fundamental supply and demand drivers of the Auckland market remain in place, and the result for October is indicative of the market adjustment phase as it adapts to these new requirements."

Across the whole of New Zealand, the median price slipped 5.1 percent to $460,000 from September, while the volume of sales fell 4.1 percent to 7,828, the institute said. Excluding Auckland, the median price advanced 1.4 percent to a record $370,000, while sale volumes gained 5.5 percent.

On an annual basis, the national median price increased 7 percent from October last year, while sale volumes rose 19 percent.

Milne said low interest rates were stoking demand in other parts of the country, and it appeared Auckland-based buyers were also searching for value in regional markets. Ten regions recorded increased sales volumes in October from September, and Northland, Manawatu/Wanganui, Wellington and Nelson/Marlborough reached new record median prices in October.

See the latest REINZ release here, with regional breakdowns: