Auckland prices reach almost two-year high

Auckland house prices edged up to a 23-month high in November as new listings held above 1,600 and demand was underpinned by stronger migration.

Thursday, December 3rd 2009, 12:40PM

by Businesswire.co.nz

The average sale price rose 1% to $550,217 last month from October, according to Barfoot & Thompson, the city's biggest real estate firm. Prices are 9.9% higher than November 2008.

"The level of activity and strength of prices in the housing market is a strong signal that in Auckland at least, property has returned to being seen as a sound, medium- to long-term investment option," said managing director Peter Thompson.

While prices are back to where they were two years ago, Thompson believes the difference between the current market and that of 2007 is the existing market is “more rational and measured”.

"Buyers are committing on the basis of the property meeting their check lists and views about value for money. They are not being driven by concerns that they must act or they might miss out.”

Thompson says the market has balanced out, not favouring either buyers or sellers. This is a marked difference from a few months ago when the scales were tipped dramatically towards a shortage of listings for willing buyers.

"There is a good level of choice available at present," he said.

New Zealanders are still optimistic about the state of the housing market, with the majority of respondents in an ASB survey last month saying now is a good time to buy a house.

Property prices hit a 10-year high for the month of October, according to Real Estate Institute data, and the revival in the market has been underpinned the country's economic recovery. Still, the Reserve Bank said in its Financial Stability Report house prices are high relative to incomes and this "may limit scope for a sustained rise".

For the second month in a row Barfoot listed more than 1,600 new properties, helping keep the number of properties for sale above 5,600, the highest number of available listings since May.

The real estate agency sold 862 houses in November, down 1% from October, and up 58% from the same month a year earlier.

In its property management division the average weekly rent achieved fell 1.2% to $397 last month from October, and was up 4.2% from the same time in 2008. The company let 676 properties compared to 760 a month earlier.

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