Demand cools in Auckland
Monday 18 June 2018
Property prices may still be hitting record highs around New Zealand but new Trade Me Property data suggests that demand in Auckland is cooling.
Auckland’s average asking price fell by a small, but significant, $350 year-on-year to $918,650 in May, according to the latest Trade Me Property Price Index.
The data also shows that the average number of buyer views on Auckland properties for sale is down by almost 6% on May last year and by 20% as compared to May 2016.
Head of Trade Me Property Nigel Jeffries says these are signs the Auckland market is settling back to a more normal rhythm after years of frantic growth.
“Auckland’s growth has been dramatic and well-documented but that growth has finally died down and we’re seeing a more normal market with dips and fluctuations.
“The key ingredient in any market growing like Auckland has been is a mismatch between supply and demand. Demand is dipping which means the Auckland market is finally slowing.”
However, Jeffries says there are exceptions to this with some pockets of the market still seeing extremely strong demand.
“Demand for the sought-after suburb of Kingsland increased significantly in May with the average number of views on properties for sale increasing 111% on last year.
“Glendene and Orewa followed close behind Kingsland, with respective jumps of 67% and 54% in the average number of views since May 2017.”
It also seems that townhouses are currently the preferred property type in Auckland as the average asking price hit the $900,000 mark for the first time in May.
“They’re still a cheaper option than buying a house in the Super City and with less maintenance costs they’re an attractive option for buyers wanting to get into the market,” Jeffries says.
Meanwhile, average asking prices around the rest of New Zealand continue to rise strongly.
The data shows the average asking price nationwide rose by 0.8% year-on-year to reach a record high $645,900 in May.
Six regions across the country also recorded record asking prices in May, with Hawke’s Bay being the standout performer – up 17.9% year-on-year to reach $534,850.
Marlborough climbed 13.3% year-on-year to $492,450, Taranaki was up 13.2% to $435,300 and Wellington jumped up 10% to $589,600.
Northland and the Bay of Plenty also hit new highs climbing 8.6% and 5.3% to $558,150 and $620,550 respectively.
Jefferies says that, anecdotally, they’re hearing of more and more people looking to the regions for a better work-life balance.
“So it’s not surprising that we’re seeing areas like Marlborough, Hawke’s Bay and Northland becoming very popular with Kiwis.”
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