Severe supply shortages and an increase in demand are sending property prices into the stratosphere in Auckland, New Zealand, according to the latest NZ Property Report from Realestate.co.nz. The 2% increase seen in March pushed the average home price to $568,820, which is a record for the market. Prices fell in other parts of the country, however, with 11 of the 19 regions Realestate.co.nz surveys reporting drops in value. Analysts expect the trend in Auckland to continue through May, at the least, and may shift even higher if more properties do not come onto the market. For more on this continue reading the following article from Property Wire.
Asking prices for Auckland homes hit a new all time high in April as the New Zealand city’s real estate market experiences a severe shortage of supply.
Data released in the NZ Property Report, a monthly report of housing market activity compiled by Realestate.co.nz, showed that the average asking price for Auckland homes for sale increased 2% from March taking them to an all time high of $568,820, the third high in eight months.
Alistair Helm, chief executive officer of Realestate.co.nz, said that the surge was understandable due to the increased pressure that has been placed on that market by strong sales that have not been matched by numbers of new listings.
‘The number of new listings is virtually identical to April last year, but what is different this year is that demand has remained high, with year on year sales up more than 20%,’ said Helm, adding that the Auckland market is still massively undersupplied resulting in a ‘chronic shortage’.
Prices in Auckland have remained at the top end of the range for the past 12 months, according to Peter Thompson, managing director of Barfoot & Thompson.
‘In April property held on to the solid prices achieved in March, with the average sales price for the month being $568,018, only $3,000 lower than the average price in March. It shows that March’s big jump in prices over those for February was no one off spike,’ he explained.
What did change between April and March was the number of homes sold. Sales numbers fell back to 750. This is consistent with the number of homes sold in April last year, but is 39.8% lower than in March. New listings for the month at 1,266 were also solid, but were down 17.6 % on those for March.
‘At month’s end we had only 4,621 homes on our books throughout Auckland, the lowest number in four months and 17.2% lower than at the same time last year. This underlines the extent to which there is a lack of choice available to potential home buyers,’ added Thompson.
Prices and sales volume tend to ease in autumn but he expects the buoyant market to continue. ‘Given the high level of buyer interest in the market and the low level of choice, prices are likely to hold firm through May. For three of the four months of this year, the average sales price for the month has been higher than the corresponding month last year,’ he said.
However, around the country the dominant trend was an easing of asking prices with 11 of the 19 regions covered by Realestate.co.nz reporting falls, ranging from just 0.2% in Gisborne to a massive 12.8% in Wiararapa. There were five regions where the asking price showed a fall of greater than 5%; Waikato, Nelson, Southland, Marlborough as well as Wairarapa.
In contrast there were some strong growth in asking price with Hawkes Bay and West Coast reporting prices up 14.1% and 5.1% respectively.
Two regions, Auckland and Hawkes Bay reported new record levels of asking prices, in the case of the Hawkes Bay the prior high was last seen way back in 2007 whereas Auckland’s prior high was only two months ago.
This article was republished with permission from Property Wire.