2015 begins with subdued selling price expectations

Property sellers were cautious about their selling price expectations according to Trade Me Property's analysis of new listings in the three months ended January 2015. Asking prices slipped by 1.1 per cent between December and January, following a fall of 1 per cent a month earlier.

The average asking price across all property types for the three months to January was $498,550, slipping back below the psychological barrier of $500,000 for the first time since October 2014.

The 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.

Head of Trade Me Property Nigel Jeffries said the easing in asking prices showed there was uncertainty around the strength of the market through the holiday period, but this was likely to only provide a temporary hiatus. "We suspect recent reports around the outlook for lower interest rates through the remainder of 2015 will see a reversal of this softness in the market over the next few months."

Mr Jeffries said this easing in the headline level of expected selling price masked strong underlying growth over the medium and long term. "Over the past 12 months we've seen asking prices increase by over 14 per cent, and over the past five years the expected selling prices have risen by just under 25 per cent."

Ups and downs in the regions

Outside the main metropolitan areas, there was strong growth in asking prices and four regions hit new record highs in asking price: Hawke's Bay (up 23.7 per cent to a new high of $391,200 over the past year), Taranaki (up 12.3 per cent to a new high of $375,250), Bay of Plenty (up 7 per cent to a new high of $454,550), and Southland (up 5.5 per cent to a new high of $238,500).

Mr Jeffries said that since the recovery of the property market in 2011 there has been a two-speed market, but that was changing. "We've become accustomed to the strength of the property market in Auckland and Christchurch, with the rest of the country languishing behind. However recent months have seen this change and the majority of provincial regions are seeing strong year-on-year gains in average asking prices."

In the year to January 2015, only Gisborne saw asking price expectations fall, down 6.7 per cent. There was low single-digit percentage growth in Northland and the West Coast, but all other regions saw growth in selling price expectation in excess of 5 per cent.

In the main metro areas, Wellington and Canterbury saw growth of 6.5 per cent and 8.8 per cent respectively, and Auckland continued to power on with price expectations up 13 per cent over the past year.

Smaller house price expectation outstrips larger properties

The trend of smaller properties (1-2 bedrooms) seeing stronger growth than the other segments of the property market continues. Over the past year, the expected selling price of smaller homes has risen by over 15 per cent from $286,000 to $330,550. In Auckland, this increase has amounted to almost $90,000 per property, landing at a new high of $552,450 in January.

Mr Jeffries said this trend reflected continuing demand from investors and first-time buyers taking advantage of the competitive marketplace for mortgages.

The asking price trend for larger houses, especially 5+ bedroom houses continues to ease. In Christchurch, the selling price expectations for larger houses tumbled 16.5 per cent year-on-year.

Apartment market continues to eclipse previous highs

Mr Jeffries said the apartment market continued to reach new heights. In January, the selling price expectation for an apartment rose to $436,800, up 17 per cent increase on a year ago. In Auckland, the market remained very active, up 21 per cent year-on-year. This represented a $75,000 increase in selling expectation in the past 12 months, and the average asking price was now $439,150.

The rate of increase across the segments of townhouses and units was less significant than for apartments, but Auckland's market for townhouses continued to rise strongly, up 11 per cent rise to a new high of $650,450.

---

Selling price expectation eases to close out the year

New Zealand property prices paused in the final month of the year, falling just under 1 per cent after reaching a record high in November. According to Trade Me Property, the average asking price across all property types for the three months to December was $504,300, above the psychological barrier of $500,000 and up more than $57,000 since December last year.

Head of Trade Me Property Nigel Jeffries said the pause in the recent surge in asking prices was expected. "December is traditionally one of the quietest months of the year so this slowdown is more about there being fewer new listings, rather than an underlying weakness in price expectation by sellers."

The 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 previous three months. It provides buyers, sellers and realtors with insights into 'for sale' price trends by property type and property size.

Mr Jeffries said the easing in the headline level of expected selling price masked strong underlying growth over the medium and long term. "In December we saw average asking prices across new Zealand increase by almost 13 per cent year-on-year, and over the past five years the expected property prices have risen more than 26 per cent."

Ups and downs in the regions

All regions except West Coast, Northland and Gisborne posted year-on-year increases of more than 5 per cent, and Gisborne was the only region that reported a year-on-year fall in price expectation.

The major metro areas of Auckland and Christchurch saw double-digit percentage growth through the year, and many other provincial areas of the country witnessed significant rises including Hawke's Bay, Taranaki, Southland, Waikato, Bay of Plenty, Otago and Marlborough.

Mr Jeffries said the spread of increases indicated that the polarisation of the property markets to just Auckland and Canterbury may be weakening as "seller optimism" encompassed more of the country.

In Wellington, the 6.9 per cent growth in sales price expectation over the year was rapid compared to more modest 0.9 per cent growth in the 2013 year. In comparison, Auckland was up 11.2 per cent in the year ended December 2013 but closed out 2014 with a 10.7 per cent annual rise. Canterbury was also similar in 2013 and 2014: up 9.2 per cent in 2013 and up 10.9 per cent in 2014.

Price expectation for smaller properties continues to grow

Mr Jeffries said the trend in price expectation for smaller properties comprising 1 or 2 bedrooms continued to grow. "In December 2013 the annual growth in asking price was barely 2 per cent, but this has accelerated through 2014 to end with annual growth of over 16 per cent. There is growing interest from investors, as well as first time buyers."

In the Auckland market, the selling price expectation of small homes hit a new high in eight of the past 12 months, rising from $465,750 in January 2014 to $531,850 in December 2014.

The trend for medium and large homes has cooled by comparison: homes with 5 or more bedrooms have fallen from an annual rate of 11 per cent in 2013 to 7.6 per cent this year.

Apartment market continues to record new highs

Mr Jeffries said the apartment market continued to grow with new record highs in selling price expectation. "Across the country, average asking prices for apartments in December rose to $431,900, up from $375,900 in December 2013. In Auckland, things were very hot - this rise in price represented a 22 per cent increase taking it to new high of $436,900. This clearly reflects a continuing strong demand for apartments in our largest city."

Across the other types of property, the appeal of units continues to show strength especially in the Christchurch market with an expected sale price which topped $300,000 for only the second time as this market segment continues to reflect strong demand matched to a continuing shortage of supply.

---

Asking prices bust through the $500,000 barrier

The average asking price of a property for sale in New Zealand broke through the $500,000 barrier for the first time in November, as the Trade Me Property Price Index rose 2.3 per cent.

The Property Price Index measures trends in asking prices for residential property listings added to Trade Me Property by real estate agents and private sellers over the previous three months. It provides buyers, sellers and realtors with insights into 'for sale' price trends by property type and property size.

Head of Trade Me Property Nigel Jeffries said the new record high in asking price signalled ongoing confidence in the property market from sellers. "The November data echoes the lift we saw in October, meaning sellers have continued to raise their price expectations to land at a new high water mark of $509,750. There has been a resounding resurgence in the property market after a pretty subdued winter and that all adds up to good news for sellers and a bitter pill for buyers to swallow. "

Mr Jeffries said the average asking price across all property types for the three months to November was up 13.7 per cent year-on-year, and the new record asking price represented an overall increase of 27.6 per cent since November 2009.

Ups and downs in the regions

Mr Jeffries said there were clear signs across the country that the pace of price increase was steady, and only the West Coast reported a fall in price expectation in November. All other regions saw a year-on-year rise in average asking price, ranging from Waikato's small lift of 1.8 per cent, through to the strong 24.1 per cent increase in the Hawke's Bay. Mr Jeffries said it was good to see the Waikato return to growth after a quiet period.

Five other regions showed double-digit growth: Taranaki (+18.2 per cent), Canterbury (+12.5 per cent), Otago (+11.6 per cent), Auckland (+11.3 per cent) and Southland (+10.8 per cent).

Mr Jeffries said the data from the country's major urban centres reflected a strengthening market heading into the pre-Christmas period, with solid increases in asking price expectations from sellers across Auckland, Wellington and Christchurch.

Smaller properties also breaking records

Mr Jeffries said there was a significant rise in price expectations for small and medium-sized properties in November, up more than 15 per cent and 13 per cent respectively to new record asking prices. "The lift in seller expectations remains strong in the major metro areas, but we've seen this spread wider too. For example we've seen asking prices for three and four bedroom properties in Taranaki, Hawke's Bay and Bay of Plenty all reach record levels."

There are early signs that the pressure in the Christchurch residential for sale market is easing, with the November increase of 12.5 per cent down on October's 13.6 per cent increase.

Apartment market surges ahead

Mr Jeffries said expectations in the apartment sector were clearly on the rise with a new average asking price record of $426,950 in November, following on from a new record last month. "It's no surprise that the driving force here is Auckland – up 22 per cent to an average asking price of $435,500, and up more than $30,000 since October. Compact living in the city remains alluring."

---

Spring surge in average asking prices

New Zealand property prices surged strongly in October, with the Trade Me Property Price Index up 2.5 per cent month-on-month.

The Property Price Index measures trends in asking prices for residential property listings added to Trade Me Property by real estate agents and private sellers over the previous three months. It provides buyers, sellers and realtors with insights into 'for sale' price trends by property type and property size.

Head of Trade Me Property Nigel Jeffries said the rise in asking price was a clear sign that the property market has a spring in its step after a subdued winter. "The October data shows the first significant increase in sellers' price expectations in six months as the market regains confidence. Up until now it has been slow to spark into life, potentially held back by the September election."

According to the Trade Me Property data, the average asking price across all property types in the three months to October was $494,750, a year-on-year increase of 12.2 per cent.

Mr Jeffries said the October asking price represented a new record high, exceeding the prior peak asking price of $491,050 seen in March 2014. "Having seen prices edge sideways for the past six months, the market has signalled a confident rise. This represents an overall increase of 23.9 per cent since October 2009."

Ups and downs in the regions

Thirteen regions showed an increase in average asking prices, and Mr Jeffries said ten regions showed a quickening pace of year-on-year price inflation compared to September.

"Taranaki and Gisborne again led the growth in average asking price, while there was sustained growth in Canterbury which was up 13 per cent. Hawke's Bay and Manawatu/Wanganui also experienced double-digit growth. At the other end of the spectrum, Waikato and West Coast were the only regions where average asking prices contracted, down 2 per cent and 6 per cent respectively."

In the major metropolitan areas, Auckland's asking price increase dropped down a gear from 10.2 per cent to 9.4 per cent, whilst Wellington remained steady at 6.9 per cent growth. Mr Jeffries said the data from the country's two major urban centres reflected a "gradual easing" from stronger increases over the past year.

Asking prices for medium houses hits new peak

Mr Jeffries said there was a significant rise in the price expectation for 3 and 4-bedroom homes as the average price passed the $500,000 level for the first time. "We've seen meaty price increases for larger houses over the past year and the price expectation for medium-sized houses has taken off in recent months with 11.9 percent growth in October as compared to a year ago. The average asking price for these properties in Auckland and Christchurch also reached a new record level at $688,700 and $480,700 respectively."

Smaller properties also continue to see strong growth in average asking price, up 13 per cent year-on-year.

Apartments push through the $400,000 barrier

Mr Jeffries said the strength of pricing in the apartment sector stood out. "Driven by the volume of apartments in Auckland, the average asking price for apartments broke through the $400,000 barrier for the first time and landed at $405,000, up a very strong 14.6 per cent on a year ago. This shows the strong appeal of compact living as both an investment option and a first step onto the property ladder."

---

Modest property price rise in September

New Zealand property prices remained subdued for the fifth consecutive month in September, according to the inaugural Trade Me Property Price Index out today. The average asking price for properties for sale rose just 0.1 per cent year-on-year.

The new Index measures trends in asking prices for residential property listings added to Trade Me Property by real estate agents and private sellers over the previous three months. It provides buyers, sellers and realtors with an insight into 'for sale' price trends by both type of property (e.g. apartments, townhouses, houses) and by house size.

Head of Trade Me Property Nigel Jeffries said the September figure was "a far cry" from the strong rises experienced earlier in 2014. "For example, we saw the change in asking price up more than 5 per cent in March, and there were 3 per cent year-on-year lifts in both February and April. It's a sign that the market is in a sustained period of quiet time."

According to Trade Me Property's data, the average asking price across all property types was $487,650 in September 2014, a year-on-year increase of 13.3 per cent. Mr Jeffries said average asking prices peaked in March 2014 at $491,050.

Mr Jeffries said that looking at the long-term data provided further evidence of the market cooling. "We looked back to September 2009 and compared this with September 2014 and we've seen asking prices rise by 26 per cent over that period. A good chunk of that rise has been over the past two years, but in recent months we've seen that pace of increase all but stutter to a halt."

Ups and downs in the regions

Six regions saw a double-digit increase in average asking prices over the past year. "Taranaki led the pack with a 23 per cent increase, followed by Gisborne which was up 19 per cent," Mr Jeffries said. "However it's important to remember that both of these regions are relatively small and tend to bounce around a bit."

The much-reported pressure of demand from buyers in Auckland and Canterbury continues to drive growth in the average asking prices in these two major metropolitan areas, up 10.1 per cent and 12.6 per cent respectively. Otago saw a 12.8 per cent increase in average asking prices year-on-year, and Nelson/Tasman was up 10.5 per cent.

At the other end of the spectrum, West Coast was the weakest (down 9.5 per cent year-on-year), followed by Waikato (up 0.2 per cent) and Marlborough (1.7 per cent).

Smaller houses are experiencing the largest increase in price

Mr Jeffries said the Index's plateau over the past few months was underpinned by a relative slowdown in asking prices for larger houses.

"We've seen average asking prices for small and medium-sized houses increase by more than 15 per cent across the country compared to a year ago, while homes with five or more bedrooms were only up 9 per cent.

"The trend is most noticeable in Wellington where larger houses showed a year-on-year decline of 5 per cent, despite the overall market in the capital ticking up nearly 7 per cent."

Compact living options driving city price growth

Mr Jeffries said asking price growth in Auckland was being pushed along by non-traditional forms of housing. "Both townhouses and units have seen asking price growth outstrip traditional residential houses, reflecting the strong demand for affordable higher-density living options in the Super City."

The apartment market, dominated by Auckland, saw a slower paced increase in asking prices. "Wellington saw explosive growth in the asking prices for apartments, up 26 per cent. The catalyst for this is the recent surge of higher priced central city apartments coming onto the market."