Asking prices for residential properties being listed for sale on Trade Me have hit a new high as we head towards summer.
The Trade Me Property Price Index, which measures asking prices for properties newly listed on the website over the previous three months, increased by 2.5% in October.
The rise in asking price was a clear sign that the property market had a spring in its step after a subdued winter, Trade Me's head of Property Nigel Jeffries said.
The average asking price for all types of residential property from throughout the country listed on the website in the three months to October was $494,750, an all time high and up 12.2% on the same period last year.
In the major centres, the average asking price in Auckland was $670,250, up 9.4% on the same period last year, in Wellington it was $440,600, up 6.9% on last year and in Christchurch it was $444,800, up 11.5% on last year.
A notable feature of the Auckland market was the strong growth in the average asking price of apartments, which broke through the $400,000 mark for the first time to hit $405,000 in the three months to October, a 14.6% increase on the same period of last year.
In Wellington, where the apartment market is dominated more by owner occupied properties than the smaller investment apartments more common in Auckland, there had also been strong growth in average asking prices, which rose to $432,250, up 16.5% on a year earlier.
"This shows the strong appeal of compact living as both an investment option and a first step onto the property ladder," Jeffries said.
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25 Comments
None of the quoted percentage rises in average property prices are matched by the meagre rise in domestic wage inflation.
“While employment has grown strongly, the picture for wages is mixed,” Ms Ramsay said. Annual wage inflation was 1.6 percent, as measured by the labour cost index (LCI). This is in line with the past four quarters. Although private sector wage inflation was 1.9 percent, growth in pay rates for the public sector has slowed to 1.0 percent. Read more
How do vicious property cycles get resolved beyond more debt?
Banks do use overseas income when assessing loan servicing.
The numbers remain unpublished
How do the receivers enforce claims against this stated income in the event of mortgage default? Moreover, how does this help unsecured creditors such as depositors when they undertake due diligence about which banking institution to fund, to avoid the grasping hand of OBR?
SH, wages are only one consideration, the most important factor that is overlooked these days is starting points. Buyers rarely start with $0... they have equity from previous sales, savings from high paid overseas jobs, inheritance, gifts from parents, etc. Pre-1960 the world had major events that wiped out accumulated wealth (world wars, disease, etc) but in the modern stable world prices are a reflection of multi-generational accumulated wealth.
...in the modern stable world prices are a reflection of multi-generational accumulated wealth.
Given the extraordinary level of per capita private debt collectively owed by NZers where did it all go - to others I presume beyond our jurisdiction.
Have we reached Peak Household Debt in NZ yet?
http://www.rbnz.govt.nz/images/key-graphs/Fig5_large.jpg - this only shows debt as % of disposable income and appears to have peaked.
http://www.interest.co.nz/charts/credit/housing-credit - click on Amount $mil tab - its is not pretty.
Always a factor - wouldn't need QE if it wasn't so - right? Can't capitalise the interest without it.
You better explain that
Are you talking about natural born kiwis who have departed?
Having some difficulty understanding NBK's departing for other places, borrowing in that other place, and then buying NZ property back in NZ
1 million of them ??????????????
Or are you talking about imports who have had their citizenship re-assigned and, once obtained, departed for other places?
Oh chillie have you done a deal relying on say-so money... have you?, I bet them seemed nice/all smiles even....
mind you if its undeclared, what number could it be? should it be, do you need it to be (you hold the pen, I'll move the paper).
dark days in deed it the joint runs on remittances from guest workers (is that a sign of having maid it?).
Simply that the higher debt is from people borrowing to bid up the price of existing assets. Yes, this causes their assets to go up in value, but only as long as borrowing continues to increase. When borrowing stops increasing then the asset prices start falling and the process goes into reverse, usually with more ferocity than the rise.
If NZ was an island financially then you might be right. These things are driven by world financial events when they happen.
When there is a panic in New York the dealers hit the "liquidate all" button on NZ stocks and bonds. They desperately need their USD back to satisfy their margin calls. So they sell all liquid NZ assets and sell the NZD proceeds and buy USD. This drives down the NZD which causes inflation. The banks stop new lending.
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