7 Jun 2012

High cost putting people off building new homes

7:09 am on 7 June 2012

High construction costs are putting people off building new homes, despite low mortgage rates.

Barfoot & Thompson managing director Peter Thompson says the cost of building and renovating is often greater than expected with projects coming in well over budget.

He says people are looking to buy existing properties which they don't have to do any alterations to.

Mr Thompson says a growing population is also putting pressure on housing stock and prices.

Barfoot & Thompson recorded its busiest May in 11 years in Auckland with the average sales price rising to a new high of more than $580,000.

The agency says sales of 1165 homes were a third higher than the same month last year, and 55% higher than April.

Mr Thompson says a growing population is also putting pressure on housing stock and prices.

He says people have moved from around New Zealand to Auckland for job opportunities, including a significant number of people moving up from Christchurch.

Mr Thompson says there's also been a number expatriates returning from overseas.