House prices soften as buyers snap up affordable options

Tuesday, 30 April 2019

Auckland prices were down 1.5 per cent for the year and 1.2 per cent in the quarter.

Sellers with small, more affordable houses have the best chance of selling them for a good price at the moment, new data indicates.

QV has released its latest statistics, which show residential property value growth slowing around the country.

Last April, values were up 7.6 per cent on the year before. Last month, they were only up 2.7 per cent. Auckland prices were down 1.5 per cent for the year and 1.2 per cent in the quarter.

QV's values are based on sales that have been settled, so there can be a lag behind data such as the Real Estate Institute's, which reports on deals that have gone unconditional.

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In Wellington, prices were up but there are signs of weakness in the market.

Regional New Zealand was still performing well – Gisborne, Horowhenua and Rotorua had the fastest quarterly growth of 8.7 per cent, 8 per cent and 7.6 per cent, respectively.

Dunedin had the fastest growth of the main centres, up 4.9 per cent in the quarter. Buyers there were particularly interested in properties selling for up to $500,000.

QV general manager David Nagel said, 'Our latest figures show that while the rate of national value growth continues to slow year-on-year, our more affordable regions continue to attract plenty of buyer demand resulting in solid value growth.

'Auckland continues to see values falling slightly, although not at the levels reported by some property commentators.'

The Real Estate Institute had reported drops in median selling price of up to 30 per cent, year-on-year, in some parts of Auckland.

'We are starting to see a change in the type of properties selling with a general trend toward smaller, lower-value, one and two bedroom properties which is leading to a drop in median sales prices across the Auckland region recently.'

He said the market was likely to become less active over winter. But any interest rate cut could help to maintain buyer demand.

Auckland property consultant James Steele said the downward movement in prices in the city represented a shift in power from sellers to buyers.

'Although there are more deals to be had I wouldn't say we are at the point of a complete buyers' market across the city.'

In Wellington, prices were up 7.5 per cent year-on-year and 1.7 per cent in the quarter.

Wellington senior consultant David Cornford said, 'The Wellington region continues to see value growth however it is clear that the rate of growth is slowing. There continues to be an under supply of property in the Wellington region and for this reason it remains a sellers' market.'

In Hamilton, QV noted a shortage in properties under $500,000 where demand was highest.

'There is a steady supply of new build, town housing under construction across Hamilton, particularly in areas in close proximity to education facilities and hospitals.

'Selling periods remain around 30 days for an average property, where higher end generally takes longer and again the low end bracket is being snapped up,' said consultant Andrew Jacques.

Christchurch was flat.

Meanwhile, data from Realestate.co.nz showed Auckland's average asking price had dropped to the lowest level since 2016, down 4.5 per cent from the pervious month to $899,916.

'The current Auckland market is not the new normal, it's the old normal which was prior to 2014, when there was time to negotiate and ensure that if you sold your house, you also had your new home lined up,' said spokeswoman Vanessa Taylor.

'If you sell your house for less than CV, in this current market it's highly likely that the home you're purchasing will also sell for less than CV.

'The New Zealand property market can have upsides at the other end of the transaction, and we mustn't lose sight of this.'

Manawatu, Coromandel and Hawke's Bay all had record asking prices on the site last month.