Average asking prices in Auckland rising 10 times faster

Average asking prices in Auckland rising 10 times faster than the rest of the country

While Auckland’s property market is continuing to experience massive demand and significant increases in average asking prices, Trade Me Property data shows the City of Sails is at odds with what is happening in much of the rest of the country.

Trade Me Property’s June Price Index has revealed that the average asking price for a residential property in our largest city increased by $130,950 in the last 12 months, a whopping ten times the average increase across the rest of the country. The average asking price for property outside Auckland increased by just $13,950, increasing from $390,600 to $404,550.

Head of Trade Me Property Nigel Jeffries said it was clearly a two-speed market. “The ‘Auckland Effect’ is casting a huge shadow over the residential property market as a whole as it continues to go mad. The fact that the average asking price in Auckland has increased ten times faster than the rest of the country makes it clear that the NZ property market can no longer be thought of as a single market: it’s Auckland on one hand and the rest of New Zealand in the other.”

Mr Jeffries said Auckland’s average asking price expectation has risen at an annual rate of 20.4 per cent, while outside of Auckland that rate of growth was just 3.6 per cent over the past year. “We see that reflected in the fact that for the first time the average asking price of a typical Auckland house is now more than double the average asking price of an equivalent elsewhere in the country.”

The average asking price of a house in Auckland is now $834,300, and outside Auckland it is $412,050.

Records keep tumbling in Auckland

In Auckland, the average asking price in June increased by 3.5 per cent since May, representing a $25,000 increase in the month.

“The record books are changing constantly in Auckland and it shows no sign of slowing down – this is the tenth consecutive month of record highs for the city,” Mr Jeffries said. “In 12 months the average asking price in Auckland has reached $773,350, that’s an enormous increase of more than $130,000.

“If we look at the last five years, the average asking price has risen 62.3 percent meaning sellers are looking for close to $300,000 more on average than they were than 2010.”

Meanwhile outside of the Super City….

Property outside of Auckland showed some far different trends. The average expected selling price dipped in June, down two per cent compared to May. However the overall trend is still very positive with the average asking price up 3.6 per cent to $404,550 over the last 12 months.

“Obviously Auckland is its own property micro-economy and we can’t expect similar returns for sellers in the rest of the country. What is positive for property sellers outside of Auckland is that over the last five years property prices have risen almost 19 per cent from $341,000 to $404,550,” Mr Jeffries said.

Around the country

Five regions reported falls in asking price expectation in June 2015 compared with 12 months ago. The last time this number of regions showed a fall was back in October 2013.

The largest decline was in the Manawatu (down 6.2 per cent) while Otago (down 2.4 per cent) continues to be a challenging environment for sellers with asking prices falling for the fifth month in a row, which equates to a drop of $29,000 in average asking price.

“In recent months we’ve seen superb growth in Waikato as Aucklanders head to the region for cheaper property alternatives, but this month was a surprise result for average asking prices in the area which declined 4.1 per cent,” Mr Jeffries said. “We’ll be keeping an eye out to see if it was a one-off blip or whether demand is easing.”

On the other side of the ledger, Auckland was joined by Taranaki and Bay of Plenty. All three regions posted double-digit growth, with Taranaki turning in 22.5 per cent growth and a third consecutive month of asking price increases above 20 per cent. Average asking prices in Taranaki have risen by $67,500 to $368,150 over the past 12 months.

By house size

Average asking prices for properties for sale outside of Auckland showed little variance. In Auckland, smaller houses showed the largest growth, up 26.8 percent to a new high of $615,750 and adding an average of $130,000 to asking prices over the past 12 months.

Table 1: Average asking price by property size & region

Death of the quarter acre section?

Demand for apartments, townhouses and units has surged across the country, and outside of Auckland these types of properties saw an 8.6 per cent rise in average asking price over the past year to $350,600.

As to be expected the Auckland market is much more active with average asking prices up a collective 22.9 per cent over the past year to $560,000, an increase of $104,400 in just 12 months. The powerhouse of urban living in Auckland is undoubtedly apartments which continue to see a steep rise in average asking price, up 31.1 per cent over the past year.

“Townhouses, units and apartments represent much more realistic and affordable entry points into the market and we’re seeing signs that some Kiwis are moving away from the quarter acre dream to get on that first rung of the property ladder,” Mr Jeffries said.

Table 2: Average asking price by property type & region

ENDS

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