Property market ends 2017 with record average asking prices

PHOTO: Trade Me Property.

Thirteen of New Zealand’s fifteen regions hit record average asking prices in December with property listings in hot demand, according to the latest Trade Me Property Price Index.

Head of Trade Me Property Nigel Jeffries said the Wellington region was leading the trend with $64,600 added to the average asking price since December 2016. “The Wellington property market gained momentum in 2017 and in December the average asking price reached a new record at $568,100, up 12.8 per cent on last year. Otago was another record breaker at $525,300, up a solid 13.3 per cent on December 2016.”

Mr Jeffries said there was a continuation of fierce demand for property across the country with 18.5 per cent more views on listings than in December 2016. “Popular holiday hot spots Hawke’s Bay, Nelson and Northland all had over 30 per cent more views on each property listing compared to December 2016 as Kiwis checked out the local listings ahead of their summer break.”

The national average asking price rose 3.4 per cent on December 2016 and was up 0.2 per cent on November to $640,450.

Regions running hot

“On the whole, the New Zealand property market ended 2017 with a bang,” Mr Jeffries said. “Gisborne and the West Coast were the only regions that didn’t reach record asking prices in December.”

Looking at the biggest risers, the average asking price in Southland grew by 13.5 per cent to $292,350, Otago rose 13.3 per cent to $525,300, Hawke’s Bay jumped 12.8 per cent to $510,550 and Wanganui was up 12.2 per cent to $327,550.

Auckland asking price reaches new record

“Homeowners in the Super City will have plenty of reasons to smile this year after the average asking price reached a new high in December, up 3.6 per cent on last year to $941,850 – an annual increase of $33,000,” Mr Jeffries said.

“We’re continuing to see strong buyer demand for property in Auckland with average views per listing up 10 per cent on December 2016. Townhouses in the city are particularly popular at the moment and reached a new record average asking price of $898,650 in December and an annual increase of 6.2 per cent.

“The last year has been a lot slower than the unbelievable property market we saw in 2015 and 2016, but the end of summer and autumn could be an interesting time for the Auckland property market if this trend continues.”

House prices outside Auckland reach $500,000

Mr Jeffries said the average asking price outside Auckland exceeded half-a-million dollars for the first time in December to reach a new high of $502,800, up 5.9 per cent on 2016.

“This jump has been largely driven by house prices in Otago, Hawke’s Bay, Southland and Wellington where the average asking price jumped between 12 per cent and 14 per cent in the last 12 months.”

Large and medium houses soar

While small (1-2 bedrooms) and medium houses (3-4 bedrooms) continue to be the most popular house type across the country, large (5+ bedrooms) and medium houses reached a record high in December climbing to $1,156,400 and $641,850 respectively.

“Auckland has seen a huge increase in demand for large houses recently which has pushed the average asking price to an eye-watering new record at $1,451,500,” Mr Jeffries said.

Predictions for 2018

“Away from the increased seller expectations on the price front, there is some good news looming for first home buyers with the easing of Loan to Value restrictions, plans to ban foreign buyers and the Healthy Homes Guarantee Act,” Mr Jeffries said. “The loosening of credit rules should allow more first time buyers get a foot on the property ladder which will result in a small increase in demand.

“We’ll also see less overseas buyers in the market in 2018 following the Government’s plan to ban international investors. We expect this to have an impact on big ticket properties around the country that are often purchased by foreign buyers, but this won’t have a significant impact on the national asking price.

“In preparation for the Healthy Homes Guarantee Act, some property investors may choose to sell up rather than face the additional costs required to comply, resulting in a potential increase in housing stock for owner occupiers.

“Demand for housing will remain solid this year and we expect to see the national average asking price grow between 2 per cent and 4 per cent,” he said.

SOURCE: Trade Me Media Release