Booming Auckland house sales jump $709 each day

Auckland house prices have risen to their highest March level in two decades. Photo / Herald on Sunday

House sales are booming nationally and Auckland leads the way with a $709 a day jump. The city last month had the biggest price rises and the most deals.

Prices in most Auckland areas are now well above the 2007-08 slump, according to Real Estate Institute figures out yesterday, which showed an extremely strong March.

The national median price jumped $10,500 from $350,000 to $360,500, a $338-a-day rise.

Auckland house sales showed price rises higher than elsewhere in New Zealand, from a median $453,500 to $475,000, up $22,000 during its hot, dry summer.

House prices have risen to their highest March level in two decades and the number of sales passed 6000 after dropping at the end of last year.

Reserve Bank figures published in the Herald this week showed mortgage volumes down 30 per cent in the first quarter of this year and mortgage brokers claiming borrowers were finding it hard to get cash from banks for houses.

But other Reserve Bank figures showed Kiwis had 1.38 million mortgages, owing $167 billion by the end of February, up 3.2 per cent on last February's $162.4 billion.

That indicates the house mortgage market is far from drying up.

Institute president Peter McDonald said he was being asked why the Reserve Bank figures showed low mortgage approvals.

Those mortgage figures included the period this year when house sales had slumped, he said, but the latest REINZ figures were just for March.

Yesterday's institute figures prompted a closer look at a random Auckland suburban selection which showed prices doubling in many areas in the past decade, despite the downturn which hit around 2007.

Reserve Bank moves to dampen speculation and widespread negativity about housing's role in the wider economy have failed to curb big gains in the area's price rises. Prices doubled in the exclusive eastern suburbs, more than doubled in Mt Albert and in most other areas.

Mr McDonald said the strengthening market was an encouraging sign and despite an abundance of good listings, prices were rising because of strong demand from buyers.

Turnover is strong. Nationally, 6161 houses sold last month, up from February's 5029 but well below the peak in March 2007 when 10,989 were sold.

In Auckland, 2187 houses were sold last month, better than February's 1578 deals but worse than March 2007's 3884.

March saw the sale of houses worth $2 billion - 3552 properties for less than $400,000, 208 for $1 million-plus, 1589 for between $400,000 and $600,000, and 812 from $600,000 to $1 million.

Institute of Economic Research economist Shamubeel Eaqub said the latest figures weren't too bad.

House sales had not deteriorated but had not recovered a lot either.

But he had a few concerns, including the way the time taken to sell homes was creeping up and the big backlog of unsold houses cited by realestate.co.nz, which would take 11 months to sell at the current pace.

"The market had only three to four months of stock in the boom days," he said.

The median rise is heavily influenced by the composition of sales and movements in house prices and he thinks the figures are inflated by a large number of big deals.

"The high end of the market is still going relatively well, but the bottom half of the market has seen sales and prices slow in recent months.

This is expected - lower-priced homes will tend to be purchased by people who are more influenced by interest rates and income conditions.

"Rising mortgage rates and plunging mortgage approvals are consistent with a still struggling housing market. House prices are still too high compared to mortgage rates, incomes and rents.

"The May Budget announcements on the treatment of depreciation could further reduce the value of a home to investors."