Property Prices on Hold as Election Drags On
Property prices on hold as election drags on
As the country holds out for an election outcome, so too is the New Zealand property market with the national average asking price in a holding pattern, according to the latest Trade Me Property Price Index.
Head of Trade Me Property Nigel Jeffries said the average asking price for a typical Kiwi house has stalled for a second month, up a minuscule 1.1 per cent year-on-year in September and down 1 per cent on August to $607,400.
“We are seeing unusually low stock for this time of year. We think homeowners are to some extent waiting for an election outcome before they put their property on the market. The market is typically flooded with new properties in spring, but we saw 10 per cent less new listings in September than last year,” Mr Jeffries said.
“Right now is a very good time for any potential sellers, there is less competition and we know there are plenty of buyers looking - views are up 3 per cent nationwide year-on-year.
“We expect to see the number of properties for sale pick up once Winston makes his decision and the uncertainty around the election has passed. Homeowners will have a better feel for how the government could affect their investment,” he added.
“Auckland’s property market has eased with the average asking price up a modest 2.5 per cent on last year as Loan to Value Ratio (LVR) restrictions slow property prices in New Zealand’s biggest city,” Mr Jeffries said.
This slowdown will be welcome news for buyers who have become accustomed to large price increases over the past 12 months. We saw the average asking price push through the $900,000 ceiling in November last year.
“Sellers in the Super City have taken their foot off the gas, with the number of new listings down 20 per cent on last year, leaving buyers with slim pickings compared to the glut of properties available over recent times.”
Mr Jeffries said Auckland was pulling the national average asking price down. “While the average asking price outside Auckland is up a healthy 7 per cent, the Super City’s slow market is dragging the national average asking price down, given it makes up 35 per cent of the country’s listings for sale.”
Wellington stands strong
“Property in the Capital, on the other hand, is bucking the trend with the average asking price up 10 per cent on last year, so buyers can expect to pay an extra $48,550,” said Mr Jeffries.
Demand in Wellington is up 5 per cent on last year, with buyers now being asked to pay an average of $528,200 for a typical property as growing interest puts pressure on prices.
“The Wellington property market has stood strong over the last five years, climbing over 31 per cent and earning homeowners a hefty $127,000 since September 2012,” he added.
Provinces in positive territory
Mr Jeffries said while the national asking price has stalled, homeowners around the country still have plenty of reason to smile this month as every region saw average asking prices increase and many areas experienced double-digit growth.
Hawke’s Bay led the trend in September, with a 20.4 per cent jump to a record average asking price of $479,650. Demand for property in Hawke’s Bay has risen equally, with 20 per cent more views per listing than September 2016.
Properties in Manawatu followed close behind, climbing 16.6 per cent to $306,650, with a 25 per cent increase in demand forcing the average asking price through the $300,000 ceiling for the first time.
Canterbury saw the smallest annual increase, climbing a tiny 0.2 per cent.
Small houses still popular
Small houses (1-2 bedrooms) continue to be the most popular house type across the country with the average asking price rising 2.9 per cent in the last year to $409,600.
“This increase has been largely driven by small houses outside of Auckland which have jumped 11 per cent in the last year and the growing demand for small houses in Wellington,” Mr Jeffries said.
Medium houses (3-4 bedrooms) increased by 0.9 per cent to reach an average asking price of $609,650, while large houses (5+ bedrooms) were up 2 per cent to $1,114,500.
Across the three main centres, Wellington houses saw the largest annual increase, with each property size experiencing strong double-digit growth.
Apartments still the hot favourite
“Apartments continue to be the hot favourite for Kiwis around the country, showing a strong annual growth of almost 7 per cent with the average asking price now $575,100,” Mr Jeffries said.
“Just a few years ago, apartments were a relatively foreign concept to Kiwi buyers, but we’ve come to accept them as a great investment opportunity and a great way to get a foot on a pricey New Zealand property ladder.”
Units in Wellington have shown significant double-digit growth for a second consecutive month, climbing 19 per cent to $361,450 and giving owners plenty of reasons to celebrate this month.
“Urban properties in Christchurch are not experiencing the same growth that we are seeing in Auckland and Wellington as buyers show some hesitation to buy while the Garden City finds its rhythm again,” Mr Jeffries said.
About the Trade Me Property Price Index:
• The Trade Me Property Price Index measures trends in the expectations of selling prices for residential property listings added to Trade Me Property by real estate agents and private sellers over the past three months.
• It provides buyers, sellers and realtors with insights into ‘for sale’ price trends by property type and property size.
• The Index is produced from data on properties listed on Trade Me Property in the three months leading up to the last day of each period. Each period’s value is a truncated mean of the complete three months’ worth of listings. This is to better reflect trends in property prices rather than month-to-month fluctuations in housing stock.
• The Index uses an “80% truncated mean” of the expected sale price to calculate the average asking price. This excludes the upper and lower 10% of listings by price, and averages the expected sale prices of the remaining properties.
• It provides an insight into ‘for sale’ price trends by type and size of property. Other reports aggregate property price data across these various properties.