Property prices in the provinces ended 2018 with a bang after six regions reached record average asking prices according to the latest Trade Me Property Price Index.
Head of Trade Me Property Nigel Jeffries said while the property market usually experiences a dip in activity towards the end of the year, demand in most of the provinces was very strong as 2018 came to a close.
“December is typically a slow month for the property market as buyers and sellers take some time off over the break but six regions bucked the seasonal trend to end the year with record average asking prices,” he said.
“The New Zealand property market was very strong all year and December was no exception.”
Otago had an 11.7 per cent year-on-year increase to $586,950 along with Northland (up 9.4 per cent to $580,950), Nelson/Tasman (up 7.2 per cent to $619,600), Waikato (up 5.9 per cent to $575,300) and the Bay of Plenty (up 5 per cent to $637,800).
Mr Jeffries said the average asking price in Hawke’s Bay also reached a new high of $566,950 after climbing 11 per cent on December 2017.
“Property prices in Hawke’s Bay have been increasing consistently since late 2016 as demand continues to grow in the region. In December the average number of views on Hawke’s Bay properties was up a solid 16 per cent on the year prior, with that level of demand we don’t see that growth slowing any time soon.”
Mr Jeffries added that New Zealand’s national average asking price reached $657,650 in December, up 2.7 per cent on the year prior.
Wellington prices dip
“Property prices in the capital followed the seasonal trend and dipped in December, falling 1.6 per cent on November to $606,900.”
Mr Jeffries said demand for property in the capital was low in December as many Wellingtonians headed away for the break. “The average number of views on Wellington properties fell 35 per cent on November but we expect to see Wellington property prices bounce back and continue their upward trend in 2019.
“The Capital’s market was very hot all 2018 and we expect to see that trend continue now that the city is waking back up after it’s summer break.”
Auckland prices remain steady
“The average asking price in Auckland hardly budged in December at $943,100, after a modest 0.1 per cent year-on-year increase on December 2017.”
Mr Jeffries said the Auckland market began to slow towards the end of 2018 and it could be a sign that property prices in the region have reached their peak for now.
Kiwis look to downsize
“With rising house prices it’s not surprising that we’re seeing smaller houses become the pick of the bunch for some New Zealanders,” said Mr Jeffries.
“Small houses are a good step onto the property ladder and they’re popular with investors too. They are more affordable and desirable to young professionals who don’t need as much space as your typical Kiwi family.”
In December small houses (1-2 bedrooms) were popular across the country and the average asking price jumped 7.6 per cent to $457,350.
Urban properties popular in the capital
“Wellingtonians are favouring apartments, townhouses and units as the average asking price for an urban property in the capital rose almost 13 per cent to $501,450 in December,” said Mr Jeffries.
“Like smaller houses, urban properties are ideal for investors and first home buyers. Typically they require less maintenance, they’re in a good location close to the city and they’re cheaper than a medium or large house in the region.
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.