Demand for Palmerston North property is growing as demand for Auckland property falls
For the first time, the website has released data measuring demand* for property in markets around the country and Auckland is the only region where demand has fallen.
The data, which is for the month of October, shows that demand for property was up by 14.1% nationwide, while nearly all regions recorded strong growth in demand.
Auckland was the exception to the rule: the data shows demand for Auckland property fell by 9.6% over October.
In comparison, demand for property in the Manawatu-Wanganui region grew by 50.4%.
While the Manawatu-Wanganui region saw the biggest increase in demand, the Otago and Taranaki regions also saw hefty growth in demand – with rises of 44.7% and 39.4% respectively.
Realestate.co.nz CEO Brendon Skipper said it was not just local buyers who were looking for Manawatu-Wanganui property.
There were 33.4% more Aucklanders and 53% more Wellingtonians viewing properties in the region on the site than there were at the same time last year.
Most of the attention was falling on Palmerston North, which has a long-term reputation as being one of the most affordable centres in New Zealand, he said.
“It makes sense that Aucklanders would be looking at other regions and not only exploring investment options, but also weighing up the lifestyle benefits of a move outside of the big city.”
The average asking price for a Manawatu-Wanganui property in October was $288,267, which was one of the lowest in the country.
In comparison, Auckland’s average asking price rose to another all-time high of $943,258 in October.
Alongside a low average asking price, Manawatu-Wanganui was ranked the third best place to invest in a rental property in realestate.co.nz’s rental yield statistics.
Skipper said that, based on their calculation of average asking price vs weekly rental price and excluding all external costs, investors would theoretically receive 5.3% yield over a 12-month period.
“Another solid reason to look at investing in Manawatu-Wanganui.”
Besides falling demand, the realestate.co.nz data contained another indication that Auckland’s market is slowing.
Auckland was the only region across the country where the amount of properties for sale was up, as compared to October 2015.
While Auckland’s stock was only up slightly (1.4%), nationally the total housing stock levels fell dramatically (by 24%) and total stock also fell in all other regions around the country.
Skipper said that Auckland asking prices continue to rise and, as such, properties were spending longer on the market.
“Vendors continue to be focused on selling at a premium while buyers are being more considered and taking time to assess all of their options.
“With more stock on the market buyers aren’t feeling the same pressure they were 12 months ago.”
If no new listings were to come onto market in Auckland, all the existing properties would be sold in 12.5 weeks, as compared to 9.3 weeks in May this year.
ASB senior economist Jane Turner said the data indicated a shift in perceptions, particularly outside of Auckland, that it is no longer a good time to sell.
Even if demand falls, the contraction in supply is likely to keep some degree of tightness in the housing market, particularly in Auckland, she said.
“This will continue to provide support to house prices in the near term.
“Over the coming year, we expect sales activity to continue to decline and inventory levels to rise, restoring balance to the housing market.”
*Demand was calculated by taking the number of listing views of residential properties on the site and comparing it with the average number of views over the previous 12 months.
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