Slowdown in NZ property market continues

Nationwide property prices have declined two months in a row

Slowdown in NZ property market continues
In June, the average asking price for a typical Kiwi property dropped 1.2% to $632,850 from May, according to the latest Trade Me Property Price Index.

The Reserve Bank’s lending restrictions appear to be having the desired impact on the national market with average asking prices taking a dive on a month ago, Trade Me Property head Nigel Jeffries said.

“The Loan to Value Restrictions (LVRs) seem to be doing the trick, with the average asking price down for the second month in a row and it’s not looking like it’s heading up any time soon, and certainly not at the pace we’ve got used to,” Jeffries said.

Auckland, with the average asking price dipping 0.9% to $911,000 for the second month in a row, “is now back to its November 2016 level.”

“Auckland’s property market has softened considerably in the last six months. Year-on-year growth is falling across the Super City, landing at 7.4 per cent in June after being up 9.6 per cent in May and up 13.4 per cent in November.”

According to Jeffries, even the regions, which have been very strong over the last year, slipped back in June. 

Excluding our three largest cities, the average asking price was down 0.6% compared to May.

Despite Auckland initiating a ripple effect, Jeffries said, Otago has emerged as a new powerhouse with the average asking price jumping 50% in the last five years, hitting a record high of $512,900 in June.

The Waikato, Northland, Otago, Nelson and Wellington were the standout regions with 21.9%, 12.5%, 11.9% and 11.2% growth respectively.

He said homeowners had no reason to panic. “The average asking price is still up 7.1 per cent on this time last year, but the rate of increase is down from 12 per cent at the start of the year.

“It means the significant capital gains of recent years are slowing down but if you’re looking to buy it will be welcome news that the deposit you require isn’t surging at the insane rates we’ve been seeing.”