Market settles into cruise mode
Moderate growth continues to mark house prices but the property market is now levelling off, according to the latest Trade Me Property data.
Tuesday, October 18th 2016, 11:00AM
by Miriam Bell
The Trade Me Property Price Index shows that New Zealand’s average asking price was up, again, to a new record high of $600,850 in September.
But this was an increase of just 0.6% on August’s average asking price of $597,250.
Head of Trade Me Property Nigel Jeffries said the New Zealand property market was “levelling out” and cruising after years of climbing and turbulence.
“With month-on- month increases of 1% or lower over the past five months, it looks to be taking a bit of a breather.
“And if we cast our eyes back over a longer period, we’ve seen the average asking price increase by 6% over the past year.”
While this increase was still pretty impressive, it represented relative calmness after the 10% and 16% annual increases in previous years, he said.
It was the Auckland market that displayed the most noticeable slowdown – despite hitting a new record average asking price of $871,800 in September.
This was an increase of 1.5% on August’s average asking price of $858,900.
Jeffries said that Auckland’s average asking price was up 12% year-on-year, which was strong growth but a huge slowdown on the 20% jumps seen over recent years.
“It’s incredible to think that another record average asking price equates to a slowdown, but there’s a definite easing after the frenzied growth of the last couple of years.”
The data shows that even Auckland’s apartment market price growth has cooled from highs of more than 40% year-on-year to a modest 2.8% increase in the year to September.
However, markets around the country continue to record strong growth.
Only two regions showed year-on-year falls in average asking prices in September. They were Hawke’s Bay and the West Coast which were down by 7.9% and 6.5% respectively.
The remainder of the country saw year-on-year increases in average asking prices.
Nine regions recorded double-digit percentage jumps, while five regions reached record price highs: Auckland, Waikato, Bay of Plenty, Wellington and Nelson.
Jeffries said the star performers of the market were, once again, Waikato and the Bay of Plenty.
“Waikato’s growth has been incredible, turning in a 20% jump in average asking price from last year to a record $467,400.
“The Bay of Plenty recorded its twelfth successive month of record highs in September, hitting $551,100 and up $150,000 over the past three years.”
He added that Nelson broke the “half a million” price barrier for the first time in September.
The region’s average asking price has now reached $505,800, which was a 10.5% year-on-year increase.
| « Affordability levels causing buyer strain | Investors over-optimistic on price growth - ANZ » |
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