Winter has cooled property prices across many parts of the country with the national average asking price falling 0.6 per cent on May to $642,050, according to the latest Trade Me Property Price Index.
Head of Trade Me Property Nigel Jeffries said the New Zealand property market was entering its typical winter slowdown and as temperatures dropped in June, so too did price expectations. “Traditionally the property market goes into a hibernation period in the cooler months and now is a great time for buyers to make a move if they have the deposit behind them.”
KiwiBuild could slow property and rental prices
Mr Jeffries said the KiwiBuild project could ultimately have a significant impact on the market if it hits its targets. “If KiwiBuild fulfils its potential we could see some changes to for sale and rent prices. Demand will ease in the first home buyer segment which will mean prices could reduce. Then, if more Kiwis get their foot on the property ladder, that will free up stock in the rental market which may see the median weekly rent dip in some areas.
“The big question in all of this is if the government can hit the numbers they’ve promised. We think it’s ambitious, but we hope they can pull it off because we know how much demand there is in both the rental and first home buyer markets.”
Auckland continues to ease
Mr Jeffries said first home buyers will be pleased to know that the Auckland property market continued to cool in June, with the average asking price dipping 0.9 per cent on May to $910,250, and more properties on the market than last year.
“The number of properties for sale in Auckland was up 5 per cent on last year and a ‘staggering’ 42 per cent on 2016. With more options plus cooling prices, it’s a great time for those looking to buy in the Super City,” he said.
Mr Jeffries said the most popular property for sale in the region was a two-bedroom apartment in the city which had 34 enquiries in June. “ Townhouses, units and apartments are becoming increasingly popular in our biggest cities and we’re seeing more first home buyers opt for these properties as they require a smaller deposit, are often close to town and require less maintenance than a house.”
Wellington prices on ice
Mr Jeffries said the average asking price in Wellington stalled in June, falling 1.6 per cent on May to $580,450. “However, with the number of listings on site was down 3 per cent on last year and the average number of views on property listings up 7 per cent, we should see the Wellington market bounce back pretty quickly once spring rolls around.
“The most popular property on Trade Me in June was a townhouse in Wellington city which received 44 enquiries in June.”
Around the regions
Mr Jeffries said two of the sunniest regions in the country saw property prices heat up and reach a new record in June. “Hawke’s Bay property prices climbed 22.7 per cent on last year to a new high of $546,300 and in the Nelson/Tasman region the average asking price jumped 10.7 per cent year-on-year to reach a new record at $590,750.”
Otago and Taranaki have both seen a solid increase in demand, according to Mr Jeffries. “The average number of views in listings’ first two days onsite jumped 20 per cent annually in Otago and 33 per cent in Taranaki so it’s a good time to sell if you’ve been considering it.”
Large houses (5+ bedrooms) soar in the capital
“Large houses in Wellington are proving very popular after the average asking price grew 15.5 per cent in the last year to reach $924,800,” Mr Jeffries said. Medium houses (3-4 bedrooms) and small houses (1-2 bedrooms) in the capital also experienced solid annual growth, jumping up 9.5 per cent and 7.8 per cent respectively.
Mr Jeffries said Auckland was feeling the winter chill with large houses down 1.9 per cent, small houses falling 0.4 per cent and medium houses almost stagnant at 0.2 per cent growth year-on-year.
Table 1: Average asking price by property size & region, June 2018 vs June 2017
Townhouses and units are hot property
Mr Jeffries said nationally, townhouses and units both reached record average asking prices in June, with townhouses up a solid 8.6 per cent on last year to $623,650 and units up 6.5 per cent to reach $445,950.
“Townhouses in the Super City drove a good chunk of this growth with a 9.1 per cent bump in average asking price to $910,550 and an 8 per cent increase in views in the first two days onsite. In Wellington, the average asking price for a unit increased an eye-watering 21.2 per cent annually to a new high of $377,000,” he added.
Table 2: Average asking price by property type & region, June 2018 vs June 2017
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.