By 3 News online staff
Auction attendance and clearance rates in the rampant Auckland housing market have dropped in a potential signal the market has reached a turning point.
A number of those in the industry say recent changes by the Reserve Bank to have a 30 percent deposit for landlords and the incoming bright-line tax on investment properties is having an effect, the New Zealand Herald reports.
Mortgage broker Bruce Patten says he'd notice auction clearance rates falling from 95 percent, with landlords increasingly looking further afield to the regions to buy property.
"There has been a frenzy of activity in the investment space before the banks changed their policies," he says.
While landlords currently accounted for 40 percent of the market, Mr Patten believes this figure could drop leaving more room for first home buyers.
Landlord Ron Hoy Fong, who attends several auctions a week, said he was at Barfoot and Thompson's auction on Wednesday and noticed fewer properties were selling.
"There are noticeably less and less people at the auctions. Over half the properties were passed in last week."
iLender chief executive Jeff Royle says he's pleased to be seeing the clearance rates fall, saying the increasing prices couldn't have continued.
"You can't sustain 20 percent price rises, which Auckland has done over the last year in most suburbs. It's quite dangerous."
Barfoot's August sales dropped for the first time in six months, showing the average residential prices to $821,079.
Real Estate Institute numbers showed median sale prices barely moving from the past month, sitting at $740,000.
Kiri Barfoot, a director of Barfoot's, said clearance rates last Tuesday's city south auction had a 58 percent clearance rate, while the city eastern auction on Wednesday had 57 percent sold, with the average across Auckland around 60 percent.
Last year, that figure would have been closer to 90 percent on a good day, she said.
However, she said this was likely to be more of a "minor adjustment" in the market.
Auckland houses were still popular and being driven by strong migration numbers, low interest rates and strong demand for few houses, she said.
Warmer weather and the Christmas season normally increase prices and volume.
3 News