Latest data: Auckland's average asking price passes $1,000,000, while Queenstown's home-buying demand trails its tourism appeal

Live data from realestate.co.nz shows that although new housing listings have increased year on year in each of the past four months, low overall stock nationwide continues to push asking prices higher.

Auckland's average asking price exceeded NZ$1,000,000 for the first time on record in September, while Taranaki and the Central North Island also reached 13-year highs. 

A combination of factors creates a seller's market

Realestate.co.nz spokesperson Vanessa Taylor said demand continued to outstrip supply nationwide, with the total number of homes available for sale in September down 17.0% from the same period in 2019. “New Zealand continues to face a housing shortage, with 10 of the 19 regions recording all-time lows in total stock.

Demand remains strong, however, with realestate.co.nz recording more than 1,250,000 users by September 2020.”

Property research firm CoreLogic's September House Price Index shows that New Zealand house prices rose 0.8% over the past three months and 7.6% over the past year. The firm believes that:

• The limited number of homes available for sale
• and the absence of any substantial change in unemployment so far

are the two main factors behind continuing house price growth. However, it also noted that further weakening in the labour market could pose risks to the housing market. 

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Peter Thompson, managing director of real estate company Barfoot & Thompson, went further, explicitly describing current conditions as a “seller's market”.

Discussing the residential property section of the Treasury's recently released economic overview, he said that although the report forecast house prices would fall 5.1% below this year's March level over the next 12 months, it also left open the possibility that prices could exceed the forecast.

Drawing on four key factors that build or undermine public confidence in the property market:

• The Reserve Bank of New Zealand's policies on commercial bank lending
• Demand from population growth
• Employment prospects
• Mortgage interest rates

he concluded: “Even if house prices fall, the decline will be brief and small, but prices will continue to rise through to 2024.” 

Auckland's average asking price passes a million dollars

According to realestate.co.nz, the national average asking price rose 11.5% year on year in September to NZ$764,864, although it eased slightly from its August high.

 “Following a sharp rise in national asking prices in August, the 7.3% decline in September suggests prices are beginning to normalise,” Vanessa said. “Peaks in average asking prices tend to recur, and strong demand for property following COVID-19 has also driven prices higher.

However, the national average asking price is now close to the range indicated by normal trends.” 

Auckland's average asking price, however, reached an all-time high in September, rising 9.5% year on year to NZ$1,003,575, compared with NZ$916,162 in the same period of 2019.

It was also 2.2% higher than the previous month. 

Auckland's average asking price has remained above NZ$950,000 since January this year.

Vanessa said it would be important to watch whether Auckland's average asking price could remain above a million dollars or would fall back to around NZ$950,000.

“Only time will tell whether Auckland sees the same stabilisation as the national market, or whether strong demand continues to push prices higher.”

Record-low stock continues to leave buyers in the Auckland region with very limited choice.

Although supply in Auckland remained active in September, with new listings up 34.4% year on year, the total number of properties available for sale was down 7.5% from the same period last year.

Record-low stock in Taranaki

Taranaki's average asking price has risen steadily since the beginning of 2020. It reached an all-time high of NZ$529,769 in September, nearly NZ$90,000 above the same period last year, an increase of 20.4%.

Despite an 11.0% year-on-year increase in new listings in September, stock remained at its lowest level since records began in 2007. It was down 50.7% from the same period last year, with just 265 homes available for sale.

“Price growth in the region has also been supported by surrounding areas. Asking prices in the nearby Central North Island and Gisborne recorded the largest monthly increases in September, rising 5.6% to NZ$638,162 and 7.8% to NZ$572,879 respectively,” Vanessa said.

Housing stock rises rather than falls in Central Otago/Lakes

Although housing stock nationwide fell 17.0% year on year, Central Otago/Lakes recorded an increase of 9.1%. It was the only region in the country with more homes available for sale in September than in the same period of 2019. There are currently 653 properties for sale in the region.

Vanessa said that although asking prices remained stable, the figures suggested demand in the region was less strong than elsewhere. “With the borders closed, many New Zealanders have flocked to tourism hotspots such as Queenstown. However, their demand for property in the region does not appear to be as strong as their desire to holiday there.”