Average prices for Auckland properties hit a February high last month, said real estate firm Barfoot and Thompson.
Barfoots, which is the largest of the Auckland real estate agencies, handling around one third of residential sales, said the average price for February was $521,323 - a new high for that month and up 3.2 per cent.
An increase in new listings, pushing choice to its highest level in 11 months, meant the Auckland housing market was 'finely balanced.'
"Taken in isolation, February was a solid month,' said Peter Thompson, company managing director.
"The average house price in February increased by 3.2 per cent on that in January, and while a seasonal uplift was expected as people returned from the summer break, an average February price close to that for the average for the previous year ( 2009 yearly average: $522,297) has never occurred previously.
Philip Borkin, economist at Goldman Sachs JBWere said given the volatility of the Barfoot and Thompson price measure and the "compositional dynamics" that influenced it, he did not place too much weight on how today's increase would filter through to nationwide price movements.
"Nevertheless, the level of prices is still below the recent peak hit in November last year. With new and available listings rising to 1,378 and 5,882 (seasonally adjusted) respectively, the tight listings situation that was supporting prices over the past 12 months looks to be drawing to an end."
"We expect the bounce in Auckland house sales to be mirrored by the nationwide data - (which is likely to be released next week)," he said.
"The weak January number is likely to be compounded by seasonal influences and uncertainties surrounding potential tax changes. In saying this, the underlying trend remains subdued and is pointing to further moderation in house price growth over the coming six months. Against this backdrop, we remain of the view that the Reserve Bank has no need to rush to tighten monetary policy," said Borkin.
Barfoot and Thompson said this morning that for the past two years the average February price had been between $10,000 and $20,000 below the average for the previous year.
The company handled 626 sales last month, up 7.4 per cent on the month before and up 12 per cent on last February. There were 1714 new listings, the highest in nearly two years.
The main driver of Auckland buying activity was owner-occupiers, said Peter Thompson, either trading up or moving into the Auckland area.
Any changes in Government policy around housing or any modest interest rate increase were "not major deterrents" for these people, said Thompson.
"We are now entering what is traditionally the most active season for house sales," he said. "Given the balanced state of the market sellers need to ensure their price right if they are to sell."
-NZ HERALD STAFF
