Downward trend spreads
Thursday 13 July 2017
The LVRs have resulted in a downward trend for the property market, with new Trade Me Property data showing reduced asking prices and slowing price growth.
By Miriam Bell
New Zealand’s average asking price dropped by 1.2% in June to $632,850, as compared to $640,650 in May, according to Trade Me Property’s latest price index.
Head of Trade Me Property Nigel Jeffries said the latest LVRs seem to be having the desired impact on the market.
“The average asking price was down for the second month in a row and it’s not looking like it’s heading up any time soon, and certainly not at the pace we’ve got used to.”
While June’s average asking price was still up by 7.1% year-on-year, the rate of increase has fallen from 12% at the start of the year, he said.
“It means the significant capital gains of recent years are slowing down.
“But if you’re looking to buy it will be welcome news that the deposit you require isn’t surging at the insane rates we’ve been seeing.”
Auckland’s average asking price also saw a dip for the second month in a row. It was down 0.9% in June to $911,000, as compared to $919,000 in May.
Jeffries said the average asking price in the City of Sails was now back to its November 2016 level.
“Auckland’s property market has softened considerably in the last six months. Year-on-year growth is falling across the Super City, landing at 7.4% in June. In November it was 13.4%.”
The Super City was not alone in its slowdown.
While average asking prices were up in most regions in June, many previously strong regions are now seeing much slower price growth.
Jefferies said that, excluding the three largest cities, the average asking price was actually down by 0.6% as compared to May.
“It shows that it’s not just big cities that are seeing some impact from tighter lending.”
Further signs of the market’s downward trend could be seen in the fact that smaller house size and units are no longer in higher demand than other property sizes or types, he said.
However, behind the national figures several markets are still performing strongly.
Jefferies said the Waikato hit a record high in June, with the region’s average asking price now $530,050 - up 21.9% in the last year and up over 53% in the last five years.
“And Otago has emerged as a powerhouse with the average asking price jumping 50% in the last five years.”
Otago’s average asking price hit a new high of $512,900 in June, which was a jump of 3.4% since May.
The apartment market has also escaped the downward trend, with average asking prices up 16.1% nationwide and a massive 18.6% in Auckland.
“There are large numbers of apartments coming onto the market in Auckland and they continue to hold strong appeal to both investors and first home buyers,” Jefferies said.
Trade Me Property’s tale of declining price growth mirrors that told in all other recent property market data, including the Real Estate Institute of New Zealand’s June data which was also released today.
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