LVR impact in Auckland market hidden in the data
The headline from the Barfoot & Thompson's November Market Update stated confidently "Mortgage restrictions no barrier to Auckland house price increases". The commentary then went on to say that the LVR impact has yet to show up in housing activity (sales) or sale prices.
The data then stated that both average sale price and median sale price were up again as highlighted by the chart below.
A cause of the further rise in sale price for November was the record level of sales of homes over $1m - 189 of them a record for the company. In November last year that total of sales over $1m was 129, a variance of 60. That increase in sales at the top end would impact the average price but the median price would be less impacted. However what is more likely to impact the median price and the average price was a variance of 97 in sales of lower priced properties. In November 2012 B&T sold 292 properties below $400,000 this November that number was 195. Seen as a proportion of all sales in the month as the chart details below the drop is significant.
Clearly the monthly drop in November was significant but the trend has been established for quite a few months now as the lower end of the market as served by B&T in Auckland (who represent around 40% of the market) has fallen away. The November one month fall from October this year is more significant than either of the past 2 years indicating that the impact of the LVR restrictions are being felt through the numbers.
These detailed sales by price bracket data is provided by B&T on their site and I applaud them for that openness, something that we have seen withdrawn by the Real Estate Institute who used to make such data accessible but now decides to charge fees to access.
As I stated last month in the article "The LVR speed limit - crippling or merely cooling the market"
We will need to wait until at least the November sales figures and more likely until the new year as well as to study housing loan approvals before the definitive statement can be made as to the true impact on the changes as a consequence on the high LVR restrictions, indications certainly show an impact, though that impact in sales is not huge as yet.
Here we have the first indicator through the Auckland market from B&T - not featured in the headline, but buried in the detail. As I said the November sales figures should give us some indications. Here is some such data - will we get detail from the Real Estate Institute in their data or will the headline smooth over the facts?