Content supplied by realestate.co.nz
One year ago (December 2017) the national average asking price for a home was $660,798 on realestate.co.nz, the country’s largest property listing site. One year later (December 2018) it sits at $673,043.
This 1.9 per cent price increase is the lowest (year-on-year) for any December since 2012.
“While this may well be a correction rather than a trend, this past year has seen the market stabilise compared to the extremes of previous years,” says realestate.co.nz spokesperson Vanessa Taylor.
“We have had fluctuations in average asking prices throughout 2018 and in fact the national average asking price in December was 3.0 per cent up on the previous month (November 2018).
“However, the modest 1.9 per cent December 2018 increase compared to December 2017 reflects a smoothing out, compared to the upward trajectory of recent years.”
“One of the challenges for sellers and buyers at the height of rapidly escalating house prices in recent years was timing.
“Purchasing a house in a stable market reduces the pressure to make snap decisions,” says Vanessa.
| 5 year history national average asking price |
% increase on previous year |
|
| Dec 2014 | $497,559 | +5.5% |
| Dec 2015 | $529,892 | +6.5% |
| Dec 2016 | $618,612 | +16.8% |
| Dec 2017 | $660,798 | +6.8% |
| Dec 2018 | $673,043 | +1.9% |
“The Auckland region has naturally dominated movements in the average national asking price due to its size,”
“In December 2018 the Auckland region’s average asking price of $953,950 represented a 2.9 per cent fall compared to December 2017 but was a 0.5 per cent increase on the previous month,” says Vanessa.
New property listings in December 2018 in the Auckland region were down 17.7 per cent compared to December 2017 (1,569 properties).
Wellington’s record-breaking December and Otago hot on its heels
Two main regions, Wellington and Otago, recorded all-time high average asking prices and had an influence on the national asking price.
The Wellington region’s record-breaking December reflects a classic supply and demand situation.
Since realestate.co.nz began collating statistics 11 years ago, in December 2018 the Wellington region recorded an all-time asking price high, the lowest level of new listings in any one month (December 2018), and an all-time low in the total number of homes for sale.
“The Wellington region has always been a relatively tight market, but this December was exceptional,” says Vanessa Taylor.
The number of new listings (282) in the region was down 23.6 per cent compared to December 2017, while total stock (747 homes), was similarly down (23.0 per cent compared to December 2017).
The average asking price in the Wellington region lifted 1.1 per cent to $647,490 compared to November 2018.
“The relatively modest increase in asking prices in a tight market does offer opportunities for several scenarios, whether that’s to sell and buy in the same market, or to sell and move to another region within commuting distance, such as the Wairarapa,” says Vanessa.
The Otago region’s all-time asking price high was similarly modest. The average asking price lifted to $418,143, representing a 2.2 per cent increase compared to November 2018.
Like Wellington, new listings were also well down on December 2017 in the Otago region, falling by 24.5 per cent (194 new listings).
Lifts in average asking prices in Wairarapa, Gisborne, Northland, Coromandel and Hawke’s Bay regions
As would be expected, it was the hot summertime regions that largely featured in terms of average asking price increases in December 2018 (compared to November 2018).
Perhaps unsurprisingly, this was led by the Wairarapa region.
“The Wairarapa region is renown as a lifestyle area, including wineries, food, art galleries and scenery,” says Vanessa Taylor.
“It’s also one hour north of Wellington city by train or car and given the tightness of this region, we would expect people to look further afield to the Wairarapa,” she says.
For Kiwis searching in the Wairarapa region, the top places they were located was Wellington, Auckland and Hawke’s Bay, showing that the main interest in the Wairarapa was coming from outside of the region itself. The hottest suburb searched in the Wairarapa was Masterton.
The total number of homes for sale in the Wairarapa region was up 24.9 per cent in December (319 homes for sale) compared to December 2018. However, the number of new homes listed on the market in December 2018 dropped 7.1 per cent compared to December 2017 (91 new listings).
In December the average asking price lifted by 11.8 per cent (to $520,110) compared to the previous month.
Gisborne, Coromandel, Hawke’s Bay and Northland also all recorded increases in average asking prices.
Gisborne led with a 6.9 per cent increase in asking price to $392,201 followed by the Coromandel (up 6.1 per cent to $709,570), Hawke’s Bay (up 5.0 per cent to $532,512) and Northland (up 2.6 per cent to $601,352).
New listings down across the country
Nationally, new listings are down 13.3 per cent compared to December 2017, representing 6,187 properties coming onto the market.
“This is not surprising, given that we had an early start to the spring/summer market this year with higher than normal levels of new listings in the prior three months,” says Vanessa Taylor.
While the Wellington and Otago regions led the drop in new listings compared to December 2017, they were closely followed by four regions with falls greater than 20.0 per cent.
The regions were; Bay of Plenty (508 new listings, down 21.5 per cent), Gisborne (30 new listings, down 50.0 per cent), Nelson-Bays (138 new listings, down 20.2 per cent) and Southland (155 new listings, down 20.9 per cent).
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61 Comments
Funny that. SYD just posted it’s biggest drop in a quarter since 2008 and is down 11.1% from their 2017 highs. Yet all is rosey in NZ..,
https://www.theguardian.com/australia-news/2019/jan/02/australian-house…
Pending home sakes in the US hit the lowest level in 5 years in Nov. mortgage applications 21% down on the year, lowest in 18 years. A 9.8% drop in the final week of the year alone. This at a time of bottom interest rates.
But NZ is different. Buy now during the dip.
We have heard this implied theory so many times it is boring. Even the various Australian state markets behave separately from each other. Sellers here are not rushing the exits, buyers are not vacating the housing market, a drop in new listings indicates a positive signal, although that could just also be a sign of potential vendors enjoying the summer. Happy new year to all and thanks to interest.co.nz staff and writers.
Houseworks, for your good self, Zachary, Yvil, Agent TTP, and BLSH, it was an Auckland - Sydney marriage of convenience on the ride up, a convenient divorce on the ride down. Is Auckland no longer an international city like Sydney, whose fortunes are dictated by the changing tide of foreign investment? Surely your analysis of the property market is more in depth than this.......
Lets face it, we all enjoyed QE. Now it's more about a fast approaching hangover that no "hair of the dog" will fix.
Houseworks says "a drop in new listings indicates a positive signal, although that could just also be a sign of potential vendors enjoying the summer"
I think this is a flawed observation. It's more a sign of weakness where vendors (likely leveraged) are opting out in hope of better prices tomorrow. Its supported by an increased dropout rate with Barfoot & Thompson (I'm sure this was recently reported by interest.co.nz). Sooner or later, vendors will simply run out of patience as dark clouds continue to accumulate globally.
Its all wishful thinking by complacent heads firmly edged in sand.
That's another reason why these stats are trumpeted but ultimately worthless. In addition they don't control for quality or spatial distribution changes and the natural aversion of sellers to take a loss, they are inherently severely upwards biased.
In theory you and I could list our houses right now for a substantial premium over it's true market value and without influencing the market price one bit positively impact the average asking price.
1.9% increase on year to year.
The rise would have been much higher Before the ban and has taken a beaten after the ban and by now has reduced the marging to 1.9% only - as sliding downwards.
My friend has been looking for a house in Pakuranga, Howick and surroundig area where the property that were earlier selling for high 900s to to early Million are going for high 800s to very early 900s (10% to 15% below RV for many) and not much fall in 700s and 800s level property (that were selling earlier) but are still down by 5%.
Would be interesting to see from here on. First Quarter of 2019 will make or break housing market. Interesting - Wait and Watch specially Auckland Market.
it’s time to dispel the myth that Auckland has a housing shortage. It doesn't.
The fact that prices are neither moving up or down, but are in fact going sideways is evidence that there is no great supply shortage.
Auckland does however have an issue with housing affordability.
Simply put, there are not enough houses that are affordable. And there are not enough people that can buy them. This is either because they are too expensive, are of poor quality, or in the wrong place. Or they are a combination of all the above
Agreed. The media narrative is that there is a huge shortage when there is not. I hope some journalists really look into this properly. We are building far too much during this boom, similar to Ireland and Spain, when it's really an affordability crisis due to a speculative bubble, not a shortage of housing. Building a lot won't make for a "soft landing". Sydney and Melbourne have done the same thing. It's just a matter of time before a correction to affordability, and it will hurt.
We've probably got a ways to go before we end up like Sydney, like building a few highrises that fall apart 4 months after being signed off. LOL. Fortunately, Jacinda created a big loophole in the OIA that allows Chinese developers to come and build such wonderful monuments here. Can't wait!
you could also add the 30,000 empty properties in the Auckland region -- which if occupied by either owners or renters would dramatically change all the equations -- starting with affordability and rental prices.
If the government could find a way of making even 15,000 of these available it would almost overnight solve many of the issues - both of homelessness, overcrowding of multi generational families and of course affordability
maybe auckland council could focus their energy on this issue instead of a few hundred Air B and B hosts whose additional income from increased rates will not even register a blip
went for a drive around Hobsonville point and Millwater today, there are a certainly a few available at Hobsonville. I wouldn't go as far as to say signs of desperation, but signs of weakness in the market.. almost everything has a price, some marked down, and even no deposit, settlement on completion being offered by the builders to try to get inventory moved..
Where is the 30,000 number coming from? Let alone the 80k..
~13,000 sale listings on realestate.co.nz and ~4k rental listings on trademe, even allowing for places not listed over the xmas break you aren't even close to 30k where are these other 40k houses hiding. (And no, i wont believe there are 40k houses posted on community noticeboards around the place.)
I don't know the numbers but just from a few drives around the many new, big developments, and also the number of for sale signs lingering for extended periods in suburban streets now, there is no shortage. What we have is an affordability and debt crisis, which won't be helped by excessive building.
When you see people living on the street or in emergency housing, its not because they are sitting on a $200k cash deposit but cant find a house to buy. The housing "shortage" is only at the bottom end of the rental market. If there were a shortage of houses to buy, then houses would selling like hot cakes after only a couple of days on market, instead of languishing there for weeks.
Does Asking Price matters as an indicator of the market sentiments? Its actual Sale Price achieved that is the true indicator.
Interesting that many RE agents'profile are increasingly having" Price Witheld" in their Sold category. Shy to reveal that actual sale prices are far below what they may have pitched to get the listing in the first place???
The shyness is selective though. In some instances the prices are disclosed & these are often above GV.
Can we draw an adverse inference then that Price Witheld is deemed Below GV??
How correct, the other day my friend was checking from an agent the selling price of a house in Howick that he was interested - At that time the agent wanted near around million (said homes.co.nz had a price range of 960000 - 1000000 - 1100000) and the agent response with the sell price was very slow and after about 2 or 3 emails, the response that he got was (instead of sell price) - had two offer one was for near 900 (cash) and another conditional near Mid 900.
Understood that the agent was shy in mentioning the sold price of 900 or 910 (CV was 1025000 independent house with land area of more than 780 sq/mt).
New prices (Low) are being establishing in area and very soon will see the real effect - Like it or not - will not be good for speculators and so called investors but will be good opprtuinty to all first home buyer and genuine long term investors.
Kane is dead right!
There is no shortage of housing in NZ at all, it is the affordability in many places!
CHCh is a great place to live with opportunity and affordable housing!
It is going to be the city of choice in Australiasia in the next few years!
Happy New Year everyone and don’t worry too much about the NZ housing market , it is what it is and this government will make it even less affordable for renters with their policies to try and kill off the investor!
News for them is that it is not going to work.
TM2,
"this government will make it even less affordable for renters"
You are dead right about that but you know when that happens the group of numpties at the helm will look for excuses and finger-pointing at what or who is to blame. Probably even try to control rents, but that's if they get another term. Enjoy the fruits of higher market rents while they last.
"Yes, at their normal pace" normal pace is good, good for tenants and landlords alike. Personally we are not operating expecting high increases or any rent increases unless we have made property improvements or there is a change in tenant. I am saying that normal pace inflation rate increases are ok for tenants in the short and possibly medium term but over the long term they will see rents double over 25 years at just 3 percent per year. The risk for tenants not becoming homeowners is that they will see ever increasing rents which over time really mount up so that it becomes harder and harder to get a home.
Auckland house prices have actually fallen slightly. REINZ HPI for Auckland has seen four consecutive months where it is lower than the same month in the previous year. The deltas for Aug-Nov are -0.49%, -0.10%, -0.48%, -0.55%.
Not earth shattering, but since no analysts had called it out I thought it was worth a mention. Worth keeping an eye on.
RNZ has run the same story (ie press handout) but included this gem from Vanessa Taylor: "Ms Taylor said it would be nice to have a crystal ball to try and predict what this year will bring, but one thing she could safely say is that what was happening in Australia right now was not an indication New Zealand will follow." So a real estate spruiker believes prices will not fall... how very unexpected!
“The risk for tenants not becoming homeowners is that they will see ever increasing rents which over time really mount up so that it becomes harder and harder to get a home” and the risk for a Home “owner” is increasing interest rates on an eye watering amount of debt that has become irrationally normalised. You have a very simplistic outlook on it.
Barfoots are not so optomistic as some others.
They have just annonuced a fall in house prices is coming:
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
If Barfoots are somewhat depressed then you better believe it.
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