What's happening in the Auckland housing market?

Auckland home buyers remained active in the market in November 2021 despite the recent COVID-19 lockdowns and the threat of rising mortgage interest rates, with the latest Barfoot & Thompson (Barfoot) data showing rising prices and sales numbers edging closer to pre-pandemic lockdown numbers.

Barfoot said the Auckland market showed minimal concerns about the interest rate rises ahead and continued to work around the COVID-19 restrictions. Its data revealed that the average price in Auckland last month was $1,250,886, up 5.2% on that for October, and 18.5% higher than at this time last year.

It noted a similar movement for the median price, which, at $1,240,000, was up 7.8% on October’s figure and 27.3% higher than this time last year.

“In recent months, the trend had been a gradual decline in the rate at which prices were increasing, but this stalled in November with the rate of increase edging up,” said Peter Thompson, managing director of Barfoot.

“Rather than seeing this as the start of a new cycle of higher increases, it is more likely to be a consequence of the abnormally high number of homes we sold in the higher price categories. Of the 1,182 homes we sold, 960 (81.2% of sales) were for more than $1 million, and of the 960, 216 were for more than $2 million.”

The November data also found that sales hit 1,182 – the highest since the COVID-19 lockdown was introduced in August, but still a quarter down on those for November 2020, which was not restricted by lockdown regulations.

Read more: CoreLogic reveals latest NZ House Price Index

Thompson shared that last month’s highlight was the growth in the number of new listings the realtor brought to the market.

“At 2,724 for the month, it was a third higher than last month and 16.7% higher than in November last year,” he said.

With a further easing of trading restrictions in December, the realtor expects the Auckland housing market to return to where normal supply and demand factors are the primary factors influencing trading.

“At month end, we had 3,933 homes on our books, close to where the market was at this time last year,” Thompson said.

CoreLogic New Zealand (CoreLogic NZ) also recently released its forecasts for 2022, with its latest House Price Index predicting a gradual easing of property value growth across New Zealand that will continue next year.

In November, the index found that national property values increased by 1.8%, slower than in October (2.1%). The annual growth rate dropped to 28.4% at the end of the month, down from 28.8% at the end of October – the first time the annual rate of appreciation has dropped since August 2020 when the market stalled after the first COVID-19 lockdown in April and May of 2020.

Nick Goodall, head of research at CoreLogic NZ, commented that the slowdown reflects a natural loss in momentum after an extended period of solid growth in the market until it took a hit from rising interest rates and tighter credit conditions. He expects the slowdown to continue in 2022, especially with further credit tightening.