New Zealand house sales fell in June from a year earlier, led by properties of $400,000 or less, indicating the Reserve Bank's restrictions on low-equity loans are curbing demand at the cheaper end of the market.
Sales fell 6.1 per cent in June from the same month of 2013 to 5,763 and were down 12.3 per cent from May, according to the Real Estate Institute. The national median price rose $33,250, or 8.4 per cent, in the year to $427,250 and was 0.6 per cent lower than in May.
The central bank introduced restrictions on high loan-to-value mortgages last October to take the steam out of the housing market in Auckland and Christchurch which it said could stoke inflation. Since then the percentage of loans at LVRs of 80 per cent or more have fallen to 5.6 per cent in May, slightly up on the first months of the year, but well below October's 11.5 per cent rate.
The number of sales below $400,000 fell by 17 per cent in June, from a year earlier, following a 25 per cent annual drop recorded in May, which the REINZ said may be a reflection of the LVR restrictions. Sales of properties with a price tag of more than $1 million rose 19 per cent in the year, to make up 7 per cent of all sales in June, while sales between $600,000 and $999,999 rose 6.5 per cent in the year to make up 20 per cent of sales. Houses in the $400,000 to $599,999 price range rose 2.3 per cent compared to a year earlier to make up 28 per cent of total sales.
