A breather in Auckland's rampant surges in house prices

The incredible surges in Auckland’s house prices may be slowing down.

Although the city’s asking prices for houses are up almost $75,000 on this time last year, they are significantly down from August 2015 when the average asking price leapt $130,000 in a year.

The Trade Me Property Index shows asking prices are up just 0.7% since May but still reached a new high of $848,100.

Auckland’s one- to two-bedroom investment properties showed a significantly lower rate of increase, up just 3.6% in the past year.

Trade Me [NZX: TME] Property head Nigel Jeffries says it looks as if the incredible surges in Auckland prices may be slowing down.

“That’s not to say the market is stalling but we’re seeing the market take a bit of a breather after sprinting ahead for months.”

In the past five years, Auckland prices have risen nearly 70%. “The average asking price for an Auckland house has jumped $349,000 in those five years,” Mr Jeffries says.

To put that in perspective, a buyer could have bought a three or four-bedroom house in Manawatu or Southland or a one or two-bedroom house in Christchurch for that money.

The rate of appreciation in prices is also easing in other parts of the country, even though the average asking price hit a new high of $590,000 nationally last month.

Since June last year, the average asking price nationally has increased by more than $46,000.

“In a normal market that’s a fantastic level of growth but, in New Zealand, that’s an easing. For example, in September there was a 12-month jump of more than $80,000. It is a sign that the foot may be coming off the accelerator.”

The regions
The average asking price in the Waikato hit $435,000 in June, up $78,000 on a year ago. In the Bay of Plenty, the average asking price is up $88,400 in the past year to another record of $543,800 and in Northland the average asking price rose 14% to $445,500, up $54,700 over the past year.

Mr Jeffries says there has also been strong growth outside the Auckland "halo."

“In Otago the average asking price went up $87,000 over the past year – an increase of more than 23% and taking it all the way up to just under $460,000 and in Hawke’s Bay there has been a 17% increase over the past year, taking the average asking price up to more than $429,000.

Units popular
Units continue to be in high demand by investors around the country, Mr Jeffries says.

“They’re cheaper than a lot of housing options but they’re still popular with renters and they sell well. There has been an increase in asking prices in every major city except Christchurch.”

Average asking prices for a unit in Auckland set a new record in June, up 17.5% to $589,000. Units in Auckland broke the $500,000 mark a year ago, and since then these properties have risen $87,000.

The average asking price for a unit in Wellington is now $300,000, an increase of $48,000 in the past year. In the hot Bay of Plenty market, units reached a new record of $370,400 in June, up a staggering 27% in the past year.

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