Correction on the cards?

The national average asking price fell by 1.3% to $569,971 in July, according to realestate.co.nz’s latest data.

It was the first drop in the national average in three months and came after the record high of $577,527 hit in June.

Conversely, demand, which is measured by viewing sessions, increased by 14.48% nationwide as compared to July 2015.

A number of regions around the country also saw an increase in demand, although Auckland was not among them.

At the same time, markets around the country returned a mixed bag of results when it came to average asking prices.

For example, Auckland’s average asking price was up 1.1% to $898,562 in July, despite a 10.39% year-on-year slow-down in demand.

Average asking prices in the Waikato, Wellington and Marlborough were up, but they were down in Canterbury, Central Lakes/Otago and Northland.

Realestate.co.nz spokesperson Vanessa Taylor said the significant variations in asking prices and demand painted an interesting picture.

It was still to be determined whether the fall in the national average asking price was the start of a trend, she said.

“There have been calls across the nation for measures to rein in house prices.

‘But it may be that the market is actually self-correcting, albeit slightly, with buyers unwilling or unable to meet ever-increasing price rises.”

The decline in demand for Auckland property was first apparent in June’s data and this month’s data reinforces the possibility that the shine may have gone off the city’s market, Taylor said.

Realestate.co.nz’s data also showed that theoretical rental yields in markets where average asking prices are going up continue to drop.

For example, Auckland’s theoretical yield is 3.28%, as compared to the West Coast’s theoretical yield of 8.44%.

This reinforced the idea that many investors appear to be looking for capital gain, rather than rental yield, Taylor said.

Meanwhile, ASB economist Kim Mundy said the Realestate.co.nz data showed historically low levels of inventory and this was keeping the country’s housing market tight.

Nationwide, they expect that the low inventory levels relative to demand meant they expect will keep the pressure on house prices.

“However, the Auckland housing market appears to be slightly quieter than elsewhere, with rising inventory levels. But low inventory levels overall will also keep pressure on prices in Auckland.”