Property market in Wellington region comes alive

The Auckland region’s average asking price in April dropped to its lowest level since 2016 and houses are taking longer to sell according to real-time statistics from realestate.co.nz.

The region’s average asking price fell 4.5 per cent to $899,916 compared to the prior month and 5.8 per cent compared to the same month in 2018. *The all-time high average asking price for the Auckland region was $982,673 in December 2017.

“We have left behind the frenetic market of 2014 to 2017 where asking prices spiralled dramatically upwards, largely underpinned by fierce competition in the market and an increase in local and offshore investors,” says realestate.co.nz spokesperson Vanessa Taylor.

“We’ve now had two years of stable pricing with a dip in average asking prices in the Auckland region this year,” says Vanessa.

New listings in the region fell in April (-12.5 percent to 2,957 listings) and compounded with properties sitting on the market for longer, buyers aren’t under the same purchase pressure.

“The current Auckland market is not the new normal, it’s the old normal which was prior to 2014, when there was time to negotiate and ensure that if you sold your house, you also had your new home lined up,” says Vanessa.

“If you sell your house for less than CV, in this current market it’s highly likely that the home you’re purchasing will also sell for less than CV.

“The New Zealand property market can have upsides at the other end of the transaction, and we mustn’t lose sight of this.”

The Auckland market also represents potential opportunity for first home buyers.

“The fall in asking average asking prices in the Auckland region also applies to entry-level homes,” says Vanessa.

All-time asking price highs for the Hawke’s Bay, Coromandel and Manawatu/Wanganui regions

Since realestate.co.nz started collecting data in 2007, it was three of the smaller regions which hit all-time asking price highs in April.

The Manawatu/Wanganui region has even taken this a step further, with all-time asking price highs in two consecutive months.

“The new $402,199 asking price high in April has seen the region breaking into the $400,000 bracket for the first time and is a 3.2 per cent increase on the previous month’s record,” says Vanessa.

“It’s a tightly held, popular region that’s recorded an 11.0 per cent drop in total listings compared with the same time last year,” says Vanessa.

Both Fielding and Levin in the Manawatu/Wanganui region were listed in the top 10 search destinations nationally on realestate.co.nz in April. To be expected, the largest number of people searching on the site in this region were locals, followed by those residing in the Wellington region and then Aucklanders.

Also popular, the Coromandel region has been active, with a new record asking price in April of $786,037 which is up 12.1 per cent on the prior month. The region also received a healthy injection of new listings in April with 119 more homes coming onto the market, that is a 10.2 per cent increase on the previous year.

“This would have been welcomed, as the total number of homes for sale in April stood at 571, which was down 5.7 percent on April 2018,” says Vanessa.

Online searches for property in the Coromandel region on realestate.co.nz were dominated by Aucklanders.

On the East Coast, the Hawke’s Bay region hit an all-time asking price high of $556,101, which was a 6.9 per cent increase on the prior month.

Nationally, the average asking price in April stood at $649,662 a 4.1 per cent decrease on the previous month which was largely driven by the drop in asking prices in the major centres.

New listings, holidays and Capital Gains Tax

Nationally, new listings were down 9.6 per cent compared to April 2018, with 8,944 homes being listed on the market. By contrast, total stock was up 6.1 per cent compared with April 2018.

“The second half of April was dominated by school holidays, Easter and Anzac Day, which plays a part in the fall in new listings and in the time people had to focus on property in general,” says Vanessa.

“Most noticeably, it was the major regions of Auckland, Wellington and Canterbury which were well down on new listings in April compared to the same time last year,” says Vanessa.

“In the previous month, the Auckland region accounted for a third of all new listings, so a fall in April was not unexpected.

“However, properties are also staying on the Auckland market for longer so there is more overall choice in our biggest region.”

Four main regions: New property listings and total stock compared to April 2018:

It was also in mid-April (17th) that Prime Minister Jacinda Ardern ruled out a Capital Gains Tax.

“It’s unlikely that this had a major impact on the property market during April given the nature of the month but it will be interesting to see what activity this decision drives over the next few months” says Vanessa.

* In April 2019, the Real Estate Institute of New Zealand (REINZ) reported that the median house price in Auckland in March fell by 2.7% from the same time last year to $856,000 – down from $880,000.

Bindi Norwell, Chief Executive at REINZ says: “While the cooling of Auckland’s median house price when compared to the same time last year might present some frustration for those looking to sell their house, it is presenting some good opportunities for first home buyers.

The latest Reserve Bank lending figures showing that mortgage lending to first home buyers was up 9.7% on the same time last year which means that more people are able to get a foot on the property ladder which can only be a good thing.”

© Scoop Media