Auckland house prices rose last month and the number of property sales increased, suggesting tentative signs that confidence is creeping back into the market, according to Barfoot & Thompson (B&T).
The average house price rose 3.5% to $512,536 from the same month a year earlier and a gain of 2% from January, the firm said in a statement. B&T sold 559 houses in February, up 8.9% from January.
“Buyers and sellers are cautiously re-entering the market, and there is cause for optimism that the housing market is settling,” managing director Peter Thompson said.
“The combination of lower interest rates, awareness of the low number of residential building permits being granted and the general growth of the Auckland region are all contributing factors to this modest turnaround,” he said.
Reserve Bank Governor has slashed the official cash rate to 3.5% from 8.25% since July and economists predict he will reduce the OCR by a further 50 basis points to a record low 3% next week. Banks have followed suit, driving down the cost of home loans.
ANZ Bank’s floating rate has tumbled to 6.95% from 1045% in October, while its five-year fixed rate has fallen to 6.5% from 8.9%, according to goodreturns.co.nz. ASB Bank’s floating rate has dropped to 6.9% from 10.25%, and its five-year fixed to 6.5% from 8.95%.
Westpac’s floating rate has declined to 6.49% from 10.45% and its five-year rate is at 6.5% from 8.6%.
Barfoot & Thompson today said listings jumped 51% to 1,470 in February from January though they were down 28% from February 2008, which was the highest in more than two years.
More than half the homes sold last month were sold above $500,000, with 30 sold for more than $1 million.
Some 786 houses and units were let last month, down five from January and 10% more than in February 2008. Average weekly rentals were little changed at $380.