Buyer demand skyrockets in New Zealand’s property market
Buyer demand in New Zealand’s property market has soared as we head for what could be a very busy winter.18 June 2020
Recently sold property at 33 Haslett Street, Eden Terrace, Auckland.
Buyer demand skyrockets in New Zealand’s property market
Buyer demand in New Zealand’s property market has soared as we head for what could be a very busy winter, according to the latest Trade Me Property Price Index.
Trade Me Property spokesperson, Aaron Clancy, said there were a number of positive signs that showed buyer interest was up in May. “May was a very busy month for prospective property buyers and we saw a spike in activity on Trade Me Property.
“Views last month were up 11 per cent on April and up 69 per cent when compared to May 2019. We also saw increases in the number of email enquiries and watchlist adds from our members.
“It’s great to see the New Zealand property market begin to get some momentum back after several months of lockdown. While the property market typically cools during the winter months, we’re already seeing signs that the COVID-19 enforced lockdown could see New Zealand buck this trend in 2020 and we might be in for a very busy winter ahead.”
Nationwide, supply also increased markedly, with a 24 per cent increase in the number of properties for sale last month when compared to April. “It seems that sellers in our larger cities are a little slower coming back to market with supply down in Auckland and Wellington, but elsewhere we’re seeing lots of activity. The increase in both supply and demand around the country are signs New Zealand’s property market is in a positive frame of mind.”
Young buyers are in the market
Mr Clancy said younger buyers continued to keep a close eye on the market, with double (54 per cent) the number of 19-30-year-olds browsing property in May when compared to the same month last year.
“This is a continuation of the trend that first emerged in April, when we saw a 38 per cent year-on-year increase in the number of under 30’s browsing property when compared to the same month in 2019. With the LVRs scrapped and interest rates at all time lows it’s an attractive time for young house buyers to get a foot on the property ladder.”
The most popular property on Trade Me last month was a three-bedroom house on Arama Avenue in Titirangi, Auckland. “The listing had over 12,400 views, with the balance of bush, privacy and water views appealing to first-time buyers and seasoned property investors alike.”
Prices remain steady across the country
The national average asking price reached $701,150 last month, a 6 per cent increase when compared to May 2019.
Mr Clancy said so far property prices are holding firm, despite the lockdown and restrictions that have been in place in the months since. “It remains to be seen if confidence in the market continues, but for now we’re certainly seeing a lot of interested buyers which is keeping prices high.”
“Excluding Auckland from the equation, the national average asking price was $591,150, up by 8 per cent compared with May 2019.”
Auckland prices see biggest growth in over 12 months
Property prices in the Auckland region saw their largest year-on-year increase in over 12 months in May. “The average asking price in the Auckland region was up 6 per cent when compared to the same month last year, to $957,350.”
“The total number of properties available for sale in the Auckland region was down 29 per cent compared to May last year, but up 22 per cent compared to April.”
Demand for listings in Auckland was up last month, reflecting the national trend. “The number of views on Auckland properties for sale rose a substantial 63 per cent in May when compared with last year, and 114 per cent when compared to April.
“The average asking price for a house in Auckland City was $1,025,050, up 7 per cent when compared to May 2019. Apartment and townhouse prices were also up by 3 per cent, with average asking prices of $703,800 and $843,300 respectively.
“If you’re thinking about selling your property in Auckland at the moment, now looks like a great time. There’s a lot of interest out there.”
Wellington prices continue to head north
Mr Clancy said property prices in the Wellington region continued their year-on-year growth streak in May.
“The average asking price in the Wellington region was $701,900 in May - a 7 per cent increase when compared with May last year, when the average asking price was $658,250.”
Mr Clancy said property prices in the Wellington region took off in mid-2016, later than the Auckland market, and have shown no signs of slowing since.
The average asking price increased in all districts within the Wellington region in May, with Masterton, Carterton and South Wairarapa seeing the strongest year-on-year growth:
|District||Average Asking Price (May 2020)||Year-on-Year Change|
|Wellington Central||Wellington Central||$832,900||$832,900||Up 8.1%||Up 8.1%|
|Lower Hutt||Lower Hutt||$678,750||$678,750||Up 11.9%||Up 11.9%|
|Upper Hutt||Upper Hutt||$636,900||$636,900||Up 7.9%||Up 7.9%|
|Porirua||Porirua||$711,000||$711,000||Up 8.9%||Up 8.9%|
|Kapiti Coast||Kapiti Coast||$664,600||$664,600||Up 7.5%||Up 7.5%|
|Masterton||Masterton||$490,250||$490,250||Up 21.1%||Up 21.1%|
|Carterton||Carterton||$548,500||$548,500||Up 14.5%||Up 14.5%|
|South Wairarapa||South Wairarapa||$601,000||$601,000||Up 12.1%||Up 12.1%|
“While the number of properties for sale in Wellington was 30 per cent lower than May last year, interest in the region increased. The number of views on properties for sale increased by a massive 146 per cent when compared to April, and 66 per cent when compared to the same month last year.”
Spotlight on Otago
Mr Clancy said there had been some interesting changes in parts of the Otago region’s property market last month.
“We have seen economic predictions that Queenstown-Lakes and Wanaka will likely be two of the hardest-hit regions by COVID-19 due to their strong focus on the tourism industry. We expect to see this reflecting in property prices in the regions.
“It was interesting to note last month that we saw demand grow faster in these parts of the country than other regions. In May, demand continued to rise for property in the Otago region with the number of views increasing 95 per cent month-on-month and 105 per cent year-on-year.
This may be a case of Kiwis on the hunt for a slice of paradise at a discounted price but it’s good to see interest in the region is still there for anyone looking to sell at the moment.”
“While the average asking price in Queenstown-Lakes dipped by 4 percent to $1,138,880 when compared to last May, the average asking price in all other Otago districts increased year-on-year. The number of properties available for sale rose 4 per cent while demand was up by 192 per cent when compared to last year.”
Mr Clancy said the average asking price in the wider Otago region was $686,450 in May, 16 per cent higher than in the same month last year when prices averaged $591,750.
“The average asking price in the Otago region has increased by 72 per cent in the last 5 years.”
New records in half of New Zealand’s regions
Bay of Plenty, Canterbury, Gisborne, Hawke’s Bay, Manawatu/Whanganui, Otago, Taranaki, Waikato, Wellington and West Coast all reached record average asking prices last month.
“Every region experienced year-on-year price growth in May with strong double-digit growth across West Coast, Taranaki, Southland, Otago, Manawatu/Whanganui.”
“The Manawatu/Whanganui region had a notable month, with the regional average asking price reaching $441,250 in May. This is up 20 per cent on May last year, when the average asking price was $367,900. The number of properties available for sale was up 4 per cent and the number of views on property in the region was up 107 per cent when compared to May last year.”
“The average asking price in Gisborne saw a similar rate of growth when compared to May 2019, reaching $449,050 last month. This is up 21 per cent on May 2019 when the average asking price was $370,000. The number of properties available for sale was down 25 per cent on May last year, while the number of views on property in the region was up 43 per cent.”
Prices rise across all house types
Mr Clancy said across New Zealand, the average asking price for all house types experienced a year-on-year increase in May. “The average asking price of large (5+ bedroom) houses in the Wellington region increased by 18 per cent to $1,049,850 when compared to the same month last year. Medium (3-4 bedroom) houses in the region increased by 7 per cent to a record high $733,950 and small (1-2 bedroom) houses increased by 18 per cent to $570,950.”
“In Auckland, the average asking price for medium houses was up 8 per cent to 978,900. Small houses and large houses were both up 6 per cent to $731,050 and $1,427,200 respectively.”
“The average asking price for townhouses and units reached a new high in all regions in May, at $661,550 and $488,700 respectively.”
About the Trade Me Property Price Index:
- The Trade Me Property Price Index measures trends in the expectations of selling prices for residential property listings added to Trade Me Property by real estate agents and private sellers over the past three months.
- It provides buyers, sellers and realtors with insights into ‘for sale’ price trends by property type and property size.
- The Index is produced from data on properties listed on Trade Me Property in the three months leading up to the last day of each period. Each period’s value is a truncated mean of the complete three months’ worth of listings. This is to better reflect trends in property prices rather than month-to-month fluctuations in housing stock.
- The Index uses an “80% truncated mean” of the expected sale price to calculate the average asking price. This excludes the upper and lower 10% of listings by price, and averages the expected sale prices of the remaining properties.
- It provides an insight into ‘for sale’ price trends by type and size of property. Other reports aggregate property price data across these various properties.