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Property Prices Decline In May

Trade Me's Property Price Index for May reveals a mixed property landscape with prices falling across the board. Property prices fell by 2.3 per cent in May compared with the previous month, to an average asking price of $857,800.

Trade Me spokesperson Casey Wylde said that this marked the second consecutive month on month decline. "Seeing prices dip slightly isn't completely unexpected heading into winter. Year on year prices continue to show a small increase of 0.9 per cent, maintaining an overall upward trend for the fourth month in a row. However the pace of growth appears to be slowing following a peak in March at 2.2 per cent."

Buyers were becoming more cautious while properties were spending more time on the market, Ms Wylde noted. "The median days on site increased to 68 days for May, an increase of 6 days from April. When properties remain on the market for longer, we generally start to see sellers adjusting their expectations and asking price," she said.

Largest properties in Auckland leading the fall

Falling asking prices were concentrated among the largest properties in the largest cities. Auckland City led the charge with the average asking price for five or more bedrooms falling 9.9 per cent in May when compared with the same time last year.

Ms Wylde said that's not surprising, given they're among the most expensive properties in the country. "Asking prices for these bigger properties in Wellington and Christchurch also dropped by 9.4 per cent and 7.5 per cent respectively."

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"It's a different story when looking at Aotearoa as a whole, with asking prices for those properties growing slightly."

She noted that higher interest rates and rising council rates will no doubt be putting pressure on homeowners. “Many homeowners are currently refixing their mortgages and this often means reconsidering what kind of home they can afford at those higher rates."

Supply and demand continue to rise

Market activity has surged with demand rising by 7% and supply increasing by 16% compared to the previous month. The largest jumps in supply were in Gisborne and Auckland, up 45 and 24 per cent respectively.

This comes despite asking prices continuing to fall. "This might seem counterintuitive, but we're seeing an increasingly dynamic market with more activity among both buyers and sellers. However we've seen supply outgrow demand. With more properties coming to market and more options to consider, buyers are feeling they're able to take more time to make a decision," Ms Wylde explained.

"Housing supply has fluctuated over recent years, but overall has been on an upward trend. Especially now, following the consent boom in 2022, we're starting to see a lot of those projects reaching completion and entering the market, largely concentrated in the main cities where the most need for new housing has been," she added.

Gisborne bucks the trend with prices on the rise

Despite the average asking price falling across the motu, Gisborne recorded a month on month price increase of 5.2 per cent in May to $653,750.

Ms Wylde pointed out that this made Gisborne the only region nationwide to see prices rise during that period. "Gisborne is definitely an outlier, going against the trend of falling prices throughout the rest of Aotearoa. This will be encouraging news for those looking to sell in the near future."

"Following the devastation caused by Cyclone Gabrielle in the region last year, supply as well as property prices took a significant hit. We're now seeing the Gisborne market recover. May's average asking price represents a 2.7 per cent increase on the same time last year," she added.

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