According to the latest Trade Me Property Price Index, Auckland’s property market is cooling while the regions continue to rise.
Head of Trade Me Property Nigel Jeffries said that after four years of “phenomenal growth” the Auckland region was finally slowing down. “For a long time the only property story has been the unbelievable growth in Auckland, but our latest data suggests that the Super City is cooling while provincial New Zealand is heating up.
“Excluding Auckland, Wellington and Christchurch, the average asking price for property in provincial New Zealand hit a new record high in December, up almost 14 per cent to $464,600. That’s a jump of $55,450 since January, a faster rate than our largest cities over the same period.”
Of New Zealand’s 15 regions, seven hit record highs average asking prices in December 2016 - Gisborne, Marlborough, Manawatu, Nelson, Northland, Southland and Waikato.
In contrast, Auckland’s average asking price was almost flat in December, down $3000 or 0.3 per cent on a month ago to $908,850.
“Auckland has experienced a few quieter months recently and we don’t see the market taking off again any time soon,” Jeffries said. “Home owners in the city don’t need to despair though, with the average asking price in Auckland jumping 13 per cent during 2016.”
But according to QV National Spokesperson Andrea Rush, Auckland could pick up again in March, like it over the same time last year.
“A similar trend of plateauing/decreasing values was seen in the Auckland market over the summer period last year following the introduction of the (30%) LVRs for the Super City region only,” said Rush.
“In 2016, the Auckland market then picked up in March, which usually the busiest month of the year, and it’s possible we may see this happen again.
“However, if interest rates to continue to rise during 2017 this may further reduce demand from investors and lead to a longer period of lower value growth.”
Century 21 boss Geoff Barnett
said there is no need for further restrictions, such as loan-to-income, as the LVR limits are showing their impact.
“We’re definitely seeing the return of a more normalised real estate market. More and more we’re seeing buyers setting the price with vendors’ expectations slowly but surely getting more realistic. I doubt that the Reserve Bank or the Government will be looking at implementing any further restrictions at the stage as the current ones are working,” he said.
Barnett doesn’t expect any major market shifts to occur in 2017. Instead he predicts any changes, if any, will be moderate and sustainable, helped by housing supply improving in Auckland and interest rates on their steady way upwards.
“While 2017 may not reach the giddy and record-breaking heights of previous years, it’s still looking pretty strong with consumer and business confidence solid as is population growth. The regions also continue to do well.
“However, let’s not forget that this year is an election year, so I suspect the second half of 2017 will be a bit quieter than usual as people for whatever reason keep their hands in their pockets. So this could really be a year of two halves.”