Property

Auckland’s average price now $1million plus

New Zealand’s biggest market is booming with Barfoot & Thompson’s latest data revealing that Auckland’s average residential property price is over the $1 million mark for the first time.

Wednesday, November 04th 2020

Barfoot & Thompson's Peter Thompson

The real estate agency’s October data has prices in the Super City firmly on the rise: with the average sales price hitting $1,045,104 and the median price reaching a new high of $967,000.

That reflects an increase of 4.8% on September and 11.3% on October 2019 for the average price and a rise of 4.% on September and 14.4% year-on-year for the median price.

Barfoot & Thompson managing director Peter Thompson says that both are significant milestones in terms of house prices in Auckland.

“They are a reflection of current demand for property and people’s confidence in the medium-term future of Auckland property prices.”

He says the market has been building towards the new benchmark prices for the past three months with prices rising steadily.

Recently, there has been much public discussion over which buyer group is driving the market up.

Data from the Reserve Bank, retail banks and from CoreLogic shows that lending to, and purchases by, both first home buyers and investors have increased significantly.

According to CoreLogic’s buyer classification data, investors’ share purchases in the third quarter of 2020 was 26% which is the highest since 28% in the third quarter of 2016.

It has first home buyers’ share of property purchases at 25% in the third quarter of 2020, which was up from 23% in the second quarter. It’s also the highest figure in the history of their buyer classification series, topping the previous peak of 24% back in in 2006-07.

Yet Thompson says that, in Auckland, while there is strong interest from first home buyers and investors, the vast majority of homes continue to be bought by existing property owners who are moving forward with their housing ambitions. 

“For existing homeowners the financial gap between their present and next home is manageable, and they are taking advantage of low interest rates to transition to the next stage of their lives.”

However, the combination of high new listings (2,119 in October - the highest in any month for over three years) and low interest mortgage finance being readily available has led to fierce competition developing among buyers, he says.

That meant the agency saw 1,319 sales in October, which was an increase of 20% on September and of 60.1% on October last year. It left October’s sales as the strongest they have been in a month for more than four years. 

Thompson says the number of property sales in the pipeline agreed and awaiting completion is extremely strong, and this will ensure that property sales numbers through to year end will remain high. 

“For the fourth consecutive month rural and lifestyle property sales have been strong and in October sales in dollar terms were more than double what they were in October last year,” he adds.

“Buyers are seeing the lifestyle market as offering good value for money in comparison to the urban market and this is leading to a shortage of available listings.”

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