Crazy price rises still the Auckland story

The company’s Property Price Index shows that Auckland’s average asking price - across all property types - increased by 1.9% in August, leaving it at $770,900.

This reverses the 2.2% fall recorded in July and leaves the average asking price just short of the June peak of $773,350.

It means that Auckland’s average asking price has now risen by 20% in the last year – and it is not just standalone house prices driving that growth.

The average asking price for an Auckland apartment has gone up by a massive 49%, or $185,000, over the last year.

Prospective apartment buyers are now looking at an average asking price of $566,359 – which is more expensive than the average 3-4 bedroom home in the rest of the country

Head of Trade Me Property Nigel Jeffries said this is a massive amount of money for an apartment but it is the grim reality of the demand from buyers in the Auckland market now.

“The quarter acre dream is well out of reach for the vast majority of first-time home buyers in the city.”

Compact housing options like apartments and units remain the most affordable options for Auckland buyers, but growing demand for them is reflected in the price growth.

Jeffries said the average asking price for Auckland apartments in Auckland has jumped by more than $65,000 since July.

“But one factor contributing to this leap is a range of new apartment developments hitting the market recently.

“Many of these are priced significantly above the existing apartment stock that was primarily built more than a decade ago.”

Meanwhile, the average asking price for the rest of New Zealand recorded a decline of 1.9% in the three months to August, leaving it at $406,750.

Jeffries said that, over the last year the average asking price of properties outside Auckland have risen just over 3%, or $13,400.

“Since August 2010 we’ve seen the average asking price of a typical home outside Auckland rise by around 20%, or $66,000.

“That’s solid growth but it’s overshadowed by the skyrocketing increases in Auckland.”

The Property Price Index shows that most regions had modest rises of less than 10%, with the exception of Hawke’s Bay (+18.9%) and the West Coast (+14.2%).

Four regions showed a year-on-year decline in average asking price in August.

Gisborne recorded the largest fall (-17.7%), followed by Otago (-3%), Taranaki (-2.3%) and Manawatu/Wanganui (-1%).

Once again, Wellington recorded modest average asking price growth in August: it is up by just 0.5% year-on-year.

Jeffries said that average asking price growth in the capital has now been sluggish for six months.