Auckland house prices drop. Wait for Labour to declare a crisis in market confidence

Nick Smith does stuff all that is useful, but there is a glimmer of hope from latest house price statistics.

House prices may be starting to drop in Auckland – but it’s too soon to tell if the latest data shows a trend.

The new mortgage lending restrictions introduced by the Reserve Bank officially kicked in on October 1, but most of the main banks had already been introducing them over the previous couple of months.

Interest.co.nz’s regional Home Loan Affordability Reports for September showed the new loan-to-value-ratio mortgage lending restrictions on residential investment properties may be impacting house prices in Auckland. ?

The lower quartile selling price dropped from its all-time high of $695,600 in August to $682,100 in September.

But at least two more months of data are needed before a trend could be evident.

The lower quartile selling price is important for first home buyers and investors because it is the price point that 25 per cent of sales would be below, making it a proxy for the market segment where first home buyers and investors are most active.

The report for Auckland estimates the small drop in the lower quartile price combined with a minuscule fall in the average two year fixed mortgage rate would have reduced mortgage interest payments faced by a typical first home buying couple in Auckland by $16 a week to $705.60.

That would still have taken up 44.5 per cent of a typical Auckland first home buying couple’s take home pay, assuming they both worked fulltime and earned the median wage for 25-29 year olds.

Labour declared a housing crisis and as is usual it appears to be self-correcting simply because Labour declared a crisis.

Mind you they will likely find another?crisis, that of falling house prices, to whinge about.

 

– NZ Herald

48%
×