25 Nov 2016

Buyers benefit as lending rules hit Auckland house prices

3:37 pm on 25 November 2016

Auckand home buyers are finally catching a break as the previously sky-rocketing housing market loses some of its steam.

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Photo: 123rf.com

Experts say some of the power had come back into the hands of buyers who can offer more realistic prices for properties, rather than be forced up or pushed out at auction.

Sticker prices are now more common in central parts of the city as houses fail to sell at auctions.

A mortgage advisor for Loan Market, Bruce Patten, said only about half of properties were selling at auction, but earlier this year rates had been as high as 85 percent.

He said at a busy auction, competitive bidders would often push a property up beyond its expected value, and a house worth $1.1 million might go for $1.3 million.

But now there were fewer buyers at auctions, so the top prices would be a more accurate reflection of the home's value.

"The power is a little bit more in the purchaser's field now. They're able to sit back and say, 'I'm at 1.1 [million], if you're prepared to come down, then we've got a sale'," Mr Patten said.

The prices may not be falling but they were certainly levelling off, he said.

"It's just really a restructuring time for vendors to bring their expectations back to the real market and purchasers have said enough's enough."

Mr Patten said changes to lending rules were most likely behind the change, with property investors now required to have a 40 percent deposit.

Harcourts real estate group chief executive Chris Kennedy said he was seeing a slight easing in the market.

A lot of properties had come up for sale in the past few weeks and that increase in supply was good for buyers, he said.

But the Auckland market was still very strong and though the number of auction sales was falling, houses were still selling, he said.

Both Mr Kennedy and Mr Patten said the Auckland housing market was likely to continue to increase in the medium term, with factors like increasing immigration keeping up demand for homes.

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