Quiet end to booming for sale market

Media Release
14 January 2016

Quiet end to booming for sale market

The New Zealand property for sale market settled in December, ending 2015 with a whimper rather than the roar witnessed throughout the year. The average asking price of houses in Auckland rose only 0.2 per cent while the rest of the country reduced by 0.4 per when compared to November.

Head of Trade Me Property Nigel Jeffries said 2015 was one of the most heated years on record for the Auckland property market, and the cooldown at the close of the year was “unsurprising”.

“For a year that witnessed unprecedented rises in expected selling prices, the market ended the year on a subdued note. House prices in Auckland often posted month-on-month growth rates over the year but as the year wound down, the focus shifted to the holiday season,” he said.

The average asking price for an Auckland property was $805,300 in December, a modest rise of just over $1,000 for the month. In the past year, the expected selling price rose 16.5 per cent to $691,350, adding $113,950 over the past 12 months.

Over the past five years, properties for sale in Auckland have seen a 60 per cent rise in expected selling price.

“Back in December 2010, the typical Auckland property was advertised with an average asking price that broke through the $500,000 barrier for the first time. Over the next five years the average asking price rose by $301,250 to reach an explosive new record high of $805,300 – that’s the equivalent of a more than $5,000 increase each month for 5 years,” Mr Jeffries said.

Bay of Plenty sets new record

The Bay of Plenty continued its “spectacular” average asking price increases in December, beating both Wellington and Canterbury to become the first region outside Auckland to break through the $500,000 barrier.

“Rising at an annual rate of 11 per cent, the Bay of Plenty has seen average asking prices in the region rise by over $50,000 in the past year to a new record of $503,550,” Mr Jeffries said.

Outside the Super City

Excluding the powerhouse Auckland market, it was more subdued across the rest of the country with the average asking price slipping by 0.4 per cent in the month, down from $429,100 in November to $427,250 in December.

However, the long term trend has been positive. Over the last year the average asking price rose by $15,400 (up 3.7 per cent), while over the last five years average asking prices outside of Auckland have risen by $79,250 (up 22.8 per cent).

Stronger property market across the regions

December was a good month for nearly every region, with Taranaki the only region to see a decrease in average asking prices.

“The regions with the fastest growth rates are those surrounding the red-hot Auckland market – Northland was up 11 per cent, Bay of Plenty up 11 per cent and Hawkes Bay up 8 per cent.

“Further south were more modest increases, ranging from 1 per cent in Canterbury to 8 per cent over on the West Coast,” Mr Jeffries said.

By house size

The average asking price for a large house (5+ bedrooms) continues to rise with a 13 per cent lift on the previous year, settling at $975,200.

“In Auckland, the average asking price for large houses shot up by $225,000 (22 per cent) in the past year, setting the highest annual rate of growth on record. The past four months alone have seen over $100,000 added to their asking price expectation,” Mr Jeffries said.

“Large houses have experienced unbelievable demand in Auckland, particularly compared to the rest of the country. In 2010 a large house in Auckland had an average asking price of $765,600, compared to similar-sized properties outside the city, which had an asking price of $575,450.

“Fast-forward five years and Auckland now has an asking price expectation of $1,258,250, up 64 per cent, while the same house types outside the city have risen just 18 per cent to $680,800,” he said.

Table 1: Average asking price by property size & region, December 2015 v December 2014

The humble unit is back in vogue

Units have long been considered the poor cousin of the urban property options but that trend has been turned on its head in the last year with the average asking price for units surging across Auckland, Wellington and Christchurch.

“The average asking price for units in December in Wellington topped $300,000 for the first time, up a massive 23 per cent over the past 12 months. In Auckland, a typical unit’s average asking price is up 25 per cent in the past year at $563,050. That’s a higher average asking price than any typical property in every other region of the country (excluding Auckland),” Mr Jeffries said.

“Even in the Garden City where expected property prices have generally been subdued in the past year, units are up 7 per cent at a near record high of $322,200.”

Table 2: Average asking price by property type & region, December 2015 vs December 2014

ENDS

MORE INFORMATION

• About the Trade Me Property Price Index:
o 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.
o It provides buyers, sellers and realtors with insights into ‘for sale’ price trends by property type and property size.
o 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.
o 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.
o 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.

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