Property Prices Spring into Action
Property Prices Spring into Action
After a slow start to spring, the New Zealand property market bounced back in October with the national average asking price climbing 2.7 per cent on last month to $623,700, according to the latest Trade Me Property Price Index.
Head of Trade Me Property Nigel Jeffries said that after five months of little movement and low stock, the market has finally sprung into action. “It’s early days but it seems that Spring has finally arrived for the New Zealand property market.
“Usually by this time of year we expect to see the property market in full swing, but with the election in play it’s pushed everything back. We’re starting to see some of the movement we’d normally expect in this peak buying and selling season.
“Now is a great time for both buyers and sellers. There is a strong demand for properties across the country with the average number of views up 7 per cent on last October. We have also seen a surge of new listings, with 30 per cent more listings coming onto the market than in September which will give prospective buyers a reason to smile.
“It’s still too early to say if our new Labour-led government has had any impact on property prices but we are seeing signs that the market is starting to revive from those election jitters.”
Auckland bounces back
“After five months of slowing down, the Auckland property market is back in action with the average asking price up 2.2 per cent on last year to $916,900, not too far off the record average asking price of $925,300,” said Mr Jeffries.
Mr Jeffries said the average number of views on property listings in the Super City are up 10 per cent on October last year which will be welcome news for prospective sellers.
“If we compare this with October 2010, we can see the massive changes in the Auckland property market over the past seven years. Since 2010, the number of houses for sale has dropped 58 per cent which has forced the average asking price up 88 per cent from a relatively tiny $487,250.
“This is a perfect illustration of the housing shortage that Auckland is experiencing. The lack of houses, combined with the huge influx of people into the city has created a very expensive market. We estimate that Auckland’s is approximately 35,000 homes short at the moment and that’s only going to increase unless the government’s ambitious building plans are realised.”
Wellington gains momentum
Homeowners in Wellington continue to have plenty of reasons to smile after the average asking price in the region rose 11.7 per cent on last year to a new high of $548,500.
“While Auckland has stalled in recent months, the capital’s property market has been surging ahead. It’s very common to see the bubble from a large property market spread - first it was the halo regions of Northland, Waikato and the Bay of Plenty and now Wellington looks to be the next cab off the rank. We’ve seen consistently strong growth and the market isn’t showing any signs of slowing.
“It’s a great time to sell your house and a tough time for first home buyers. We are seeing plenty of demand from buyers in the region, and from a seller’s perspective there’s not too much competition. That sort of equation means that sellers should hope for top dollar for their properties and buyers are going to have to dig deep to get that place they want.”
Property prices climb outside Auckland
The average asking price outside Auckland reached a new record in October, climbing 6 per cent on last year and up 2 per cent on September to $490,700, according to Mr Jeffries.
“As more Kiwis pack up and move out of Auckland to get a foot on the ladder, property prices will continue to rise as supply struggles to keep up with demand.”
Central North Island stands strong
Mr Jeffries said that almost all the provinces were in positive territory in October with some experiencing record high asking prices.
“The central North Island continues to be a strong performer with the Hawke’s Bay, Manawatu and Waikato all reaching record average asking prices in October, climbing to $487,300, $309,700 and $534,900 respectively.”
In the South Island, Marlborough saw the highest annual increase of $51,500 to a record average asking price of $464,650.
Large houses in Wellington edge close to $1 million
“The staggering cost of large houses (5+ bedrooms) in Auckland, which now sit at $1,392,500 has pushed these properties beyond the reach for many Kiwis and it looks like Wellington could soon break through the million-dollar ceiling soon too,” Mr Jeffries said.
The average asking price of large houses in the capital jumped 18.7 per cent on last year to a new record high of $973,550. “Small 1-2 bedroom properties in Wellington also experienced a similar increase, jumping 17.9 per cent in the last year to $408,550, ” he said.
Mr Jeffries said small (1-2 bedrooms) and medium (3-4 bedrooms) houses continue to be the most popular house type across the country.
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.