The Property Price Index provides a monthly analysis of the national and local property market. The index tracks the asking price of properties listed in the past three months, based on size and type of property, to assist you on the next step towards buying or selling a home.
The upcoming general election and the Reserve Bank’s Loan to Value Restrictions (LVRs) have cooled the New Zealand property market with the nationwide average asking price remaining relatively unchanged in the last month, according to the latest Trade Me Property Price Index.
Head of Trade Me Property Nigel Jeffries said New Zealand’s average asking price has stalled at $631,350 - down very slightly from $632,850 in June and falling 2.1 per cent since peaking at $644,000 in April.
“We’ve noticed over the last few months that the LVRs are biting into the property market and causing a slow down, and we suspect next month’s election is playing its part too,” he said. “Over the years we’ve seen some uncertainty in the property market around an election from both sellers and buyers and this year appears to be no different.”
Homeowners can rest assured, with the average asking price still up 6.8 per cent or $40,000 since July 2016.
Auckland market offers more choice for prospective buyers
Mr Jeffries said the Auckland market had continued to cool down after some red-hot recent years. “Auckland’s average asking price is up a miniscule 0.1 per cent since June, hovering around $912,000 this month, and just a drop in the ocean compared to the increases we’ve become accustomed to in our largest city.”
“While buyers appear to be holding back, thanks to the LVRs and the election, there’s plenty of choice for them out there. The number of Auckland listings for sale on Trade Me Property is up almost 20 per cent in the last 12 months so we think now is a good time to try your luck, if you’ve got the deposit behind you.”
Bay of Plenty proves popular
While prices around the regions (areas excluding Auckland, Wellington and Christchurch) are cooling, down 0.7 per cent since June, the Bay of Plenty continues to perform strongly.
“The Bay hit another record average asking price of $595,100 this month, jumping 8.9 per cent in the last year,” Mr Jeffries said. “Along with the rising average asking price, we have also seen a 15 per cent increase in the number of Bay of Plenty properties added to Trade Me members’ watchlists since May.”
Wellington steps back
Mr Jeffries said Wellington was another example of the LVRs and the election slowing the market. “While there are less properties on the market in Wellington, the average asking price has dropped 4 per cent since April this year to $522,550. Generally the dip in supply will stoke prices, as demand outstrips the listings available but we’re not seeing that at the moment.”
“Although the drop is significant, the average asking price still 10.9 per cent higher than July last year. I’d expect to see the average asking price move pretty quickly after the election-bred uncertainty passes.”
Regional pricing trends
Mr Jeffries said that while we are seeing buyers and sellers pump the brakes over the past few months, there’s still plenty for homeowners to smile about with every region around the country seeing average asking prices increase on this time last year.
“It’s rare for every region in the country to see year-on-year increases,. Waikato is July’s standout with a 19.2 per cent jump in average asking price in the last year, closely followed by Northland’s 15 per cent rise.”
Small houses proving popular
The popularity of small houses (1-2 bedrooms) has increased steadily over the last 12 months.
“Small houses were by far the most popular housing type in July with a nationwide increase of 9.4 per cent in the past year to $424,250. Wellington led the trend with a 15 per cent jump in the last 12 months,” Mr Jeffries said.
Medium houses (3-4 bedrooms) were second, up 6.4 per cent in the last year followed by large houses (5+ bedroom) which have only increased 5.2 per cent.
“It comes as no surprise that we are seeing a growing demand for small houses given they are prime real estate for investors and first-home buyers. The bigger ticket homes with 5 or more bedrooms are becoming less and less feasible for many New Zealanders and this is a trend that will likely continue.
Table 1: Average asking price by property size & region, June 2017 vs June 2016
Units price dips
“We are continuing to see an annual drop in the average asking price of units across New Zealand which is down 5.3 per cent since July last year.”
Apartments on the other hand have shown steady annual growth with a 15.4 per cent increase nationwide. Mr Jeffries said this was driven by the growing demand for apartments in Auckland which grew 14.1 per cent in the last 12 months.
Table 2: Average asking price by property type & region, July 2017 vs July 2016
About the Trade Me Property Price Index
The Index is a detailed analysis of expected sale price. Listings are from private advertisers and real estate agents.
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 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. This excludes the upper and lower 10% of listings by price, and averages the expected sale prices of the remaining properties.
It is the first report to provide an insight into 'for sale' price trends by type and size of property. Other reports tend to aggregate the property price data across these various properties.