15 Nov 2017

Auckland house prices drop

11:25 am on 15 November 2017

House prices continue to rise in most parts of the country, but not in Auckland - where the average price is down 3.2 percent on last year.

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Average housing prices in Auckland have dropped by 3.2 percent on last year. Photo: RNZ / Diego Opatowski

The Real Estate Institute's house price index rose 0.2 percent in October from the month earlier to a record level, and up 1.6 percent on the year before.

Auckland prices continued their retreat, down 1.2 percent in the past 12 months, while the rest of the country gained 6.5 percent.

"As we've seen for some months now, prices across the country have continued to increase, albeit at a slower rate than the increases we've seen in some regions for the last couple of years," REINZ chief executive Bindi Norwell said.

The national median price rose modestly to $530,000, but Auckland's median price fell 3.2 percent to $850,000 on the year before, the biggest fall in nearly seven years.

Auckland's fall was largely because of a large number of apartments being sold in the city.

The number of houses being sold was down 16 percent on a year ago and the market continues to be starved of stock, while it is taking longer to sell houses.

Ms Norwell said she hoped the Reserve Bank wold announce an easing on the restrictions on low-deposit lending at its six monthly financial system report at the end of the month.

"This data is evidence that the LVR restrictions have done their job of slowing the market, which is why REINZ has repeatedly called for LVRs to be reviewed for first time buyers."

An economist said the near term outlook for the market was still downbeat.

"Uncertainty around the impact of new housing policies on the market is likely to continue for some time.

"As a result, we expect to see this period of soft sales activity and slowing house price appreciation - or further small falls in certain regions - to continue into 2018," Kim Mundy of ASB Bank said.

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