Super City shows more election jitters than the regions

Property buyers in New Zealand’s largest city seem to be more concerned about the election than their provincial cousins with average asking prices dropping 2.1 per cent in Auckland year-on-year and rising 10.5 per cent in the regions. Meanwhile the national average asking price was up just 2.7 per cent to $613,450.

Head of Trade Me Property Nigel Jeffries said the latest edition of the Trade Me Property Index showed the non-metro regions outside Auckland, Wellington and Christchurch were faring better with Loan to Value Restrictions (LVRs) and pre-election nerves. “While sellers in the regions are being restrained, with the number of listings down 19.6 per cent on this time last year, buyers are still keen with the average asking price jumping to $473,450.

“However we’re seeing some unusual activity in Auckland. Despite rising demand with new listing views up 15 per cent and supply struggling to keep up, we are not seeing the price movement we would expect. Auckland’s average asking price is down 2.1 per cent since July to $892,450, dipping under the $900,000 threshold in August for the first time since January 2017.”

Mr Jeffries said the increased activity and lower stock would normally push prices up, but that hadn’t happened yet. “The property market is usually pretty simple, if there’s low stock and high demand prices go up, unless there’s an external influence. Auckland buyers seem to be slowing down as uncertainty about the election and the LVR restrictions bite. Clearly out in the regions they’re not suffering the same concerns.”

Mr Jeffries said he expected to see prices pick up again after the election. “Typically we’ll see a resurgence in the market once sellers and buyers know which way the political winds are blowing.

“Both National and Labour have released significant policies regarding housing in the last few days so it will be interesting to see how the market reacts to possible home buyer grants or the banning of overseas speculators.”

Central North Island rises

Mr Jeffries said that while there was some uncertainty and trepidation in the market, most regions were still showing strong increases year-on-year in August.

“The central North Island is particularly strong at the moment, with Waikato, Hawke’s Bay and Wanganui each climbing more than 17 per cent in the last 12 months.”

In the South Island, Marlborough, Nelson and Southland have shown the largest increases, rising 10.7, 8.2 and 7.5 per cent respectively. Meanwhile Canterbury and the West Coast dropped 0.4 and 1.3 per cent.

Waikato continues to climb

Mr Jeffries said the Waikato was an example of where low stock is helping to drive demand, with each new listing in the region receiving an average of 16 per cent more views than August last year.

“The Waikato is yet to see asking prices ease like in neighbouring Auckland. Clearly the election and LVRs aren’t phasing buyers as much in Mooloo country, with the average asking price up 17.5 per cent since last year to $534,750.”

Christchurch cools

“Along with Auckland, the South Island’s largest city is also feeling the pinch with pre-election jitters and LVRs cooling the Christchurch property market right down, Mr Jeffries said.

“Buyers have taken their foot off the gas in the Garden City, dropping the average asking price 1.5 per cent since July to $461,250, the lowest it has been in over 12 months.

“While this is great news for prospective buyers, homeowners can sleep easy with the average asking price still up 9.3 per cent in the last three years.”

Small houses are still the favourite

Small houses (1-2 bedrooms) continue to be the most popular house type across the country with the average asking price rising 6.3 per cent in the last year to $417,750. Wellington led the trend with a “staggering” 19.6 per cent jump to $424,050 over the past year.

“The increasing popularity of small houses illustrate the affordability threshold for investors and first home buyers as larger houses get further out of financial reach,” Mr Jeffries said.

Large houses (5+ bedrooms) were up 2.6 per cent and medium houses (3-4 bedrooms) have increased 2.2 per cent in the last year.

Wellington units and townhouses more popular than ever

Units in Wellington have shown a remarkable annual increase of 21.3 per cent with the average asking price for a unit now $347,550. Townhouses have equally grown a noteable 17.3 per cent in the last year to $506,750.

“Across the country we are seeing more Kiwis look at units and townhouses as a low-risk entry point into the market. As house prices in the capital have steadily increased over the past 5 years, so to has the appetite for these smaller, more manageable investments,” Mr Jeffries said.

ENDS

More Information 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.

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