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Auction figures 'reflect an adjustment period'

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Fuseworks Media
Fuseworks Media

Any softening of the property auction market in Auckland is likely to be merely a temporary, cautious reaction as new financial restrictions come into play, says Harcourts NZ CEO Chris Kennedy.

Figures recently released by Quotable Value (QV) indicate auction clearance rates have slipped in Auckland in recent weeks.

"What we’re seeing is really just buyers taking a breath in the wake of new LVR restrictions and the bright-line test for investors.

"I suspect it’s just a temporary measure as buyers figure how the law changes will impact on them. Then it will be business as usual. There’s no need to panic," Mr Kennedy says.

"There has been some talk about the market in Auckland not experiencing its traditional spring jump in activity, but you have to take that into context. We also didn’t really experience a winter quiet period this year in Auckland."

Harcourts NZ figures for the written sales in the Northern Region over the traditionally quieter months of June to August were on a par with those earlier in the year, Mr Kennedy says.

Harcourts figures for November 2015 are still to be finalised but provisional Northern Region numbers show 2200 written sales recorded last month up 4.4% on last year and up 2.2% on October 2015.

Those early figures do indicate a dip in the number of auctions by 38.5% between October and November, but there was a comparable dip of 20.9% between October and November in 2014.

"The key figures to focus on are the amount of property on hand, which dropped again last month, as well as the number of sales and average property prices, which are both up.

"That indicates there is plenty of activity still in the market, and demand is still outstripping supply, keeping prices up. The pace may have slowed a little but we’re still very much heading in the right direction," Mr Kennedy says.

Provisional figures for the Northern Region show a 5% increase in house prices in November, year on year, to $521,194.

The year on year figures also showed property on hand dropped 29% while new listings were down 27%.

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