An economist says the latest sales figures from Auckland's largest real estate agency show the Reserve Bank's restrictions on banks lending to people with small deposits are biting hard.
Westpac economist Michael Gordon estimates sales of houses by Barfoot & Thompson in November fell 9% in seasonally adjusted terms.
That's in contrast with the views of Barfoot & Thompson managing director Peter Thompson, who says if the restrictions are having an impact on the Auckland housing market, they haven't yet shown up in housing market activity or sales prices.
Barfoot & Thompson says its average sales price for a house rose 3.2% in November from October to $684,646.
Michael Gordon says Westpac had been expecting the lending restrictions to bite hard at first and looking at the seasonally adjusted figures it does seem sales were down in November compared to October.
"Another way of looking at it, without having to deal with the issues of adjusting the numbers, is that sales in November were down just slightly, half a percent, on the same month last year and that's the first time they've been down year on year going all the way back to February 2011."
Mr Gordon says there has been a substantial turn in the market trend at the same time as it was expected because of the new loan to value limits.
He says Westpac predicted that there would be an initial shock to the market when the low deposit rules were introduced as people learned to live with it.
Mr Gordon predicts the impact over the first year of the rule's operations would be a small drop in house sales, a small slowdown in the rate of house price growth, and a change in the mix of buyers.
He says people who could not get a large enough deposit would be shut out of the market, but there would be less need to pay top dollar for houses amongst those who can get a large enough deposit and are still eligible for a loan.
"So our view was that you'd still see houses continuing to sell but it would probably be a slower process and there'd probably be less in the way of bidding wars."
