Auckland House Price
2nd Jan, 2019
Auckland House Price Drop after Years of Buoyancy
In the past five years or so, Auckland’s property market has enjoyed what looked like one of the best runs in decades. Since the outset of 2018, however, the asking prices for homes in Auckland have been falling. In fact, in August, the average Auckland house price fell below $900,000 for the first time in nearly one year, which is sweet news to Auckland house buyers but a different story for homeowners.
Auckland House Price Correction
It can be quite frightening for a homeowner to see the value of their house dwindle, but the news of falling house prices in the region isn’t surprising at all. House prices have to fall at one point or another – it is an indispensable part of real estate market dynamics. According to market analysts, the drop in the average Auckland house price is a sign of “price correction.”
With a 1.6% dip in Auckland house price in the past 10 months, the national average asking house price has also dropped to around $632,800. That means the average house price in New Zealand has declined by nearly 1.4%. In some markets of Auckland, the house price average has hit below $810,000, a ten-month low compared to $900,000 this time last year.
While experts maintain that Auckland property market is experiencing a period of price correction, there’s still a high demand for houses. In other words, it is a perfectly good time to sell your house in Auckland. The price correction in and of itself is in line with what’s happening in several markets in Australian and even here at home.
Even still, some markets in New Zealand have enjoyed recorded house prices in the last 12 months. In the Nelson/Tasman market, for instance, the asking price went up 12% in the past year to settle at a staggering $595,500. For Hawke’s Bay, the houses prices have gone up even higher. The average house price in Hawke’s Bay is $545,100, which means that the average house value has soared by 23%. But that is nothing compared to the average asking price of $581,500 in Wellington
So, what could be the reason behind the decline in Auckland house prices? The answer is pretty straightforward: more people are selling. In fact, there was an increase of 7% in the number of new listings in Auckland. As such, if you are looking to sell your house in Auckland, you are not alone.
In the next quarter, the property markets experts and economists are foreseeing that Auckland house prices will remain stagnant. The bigger question, however, is not how long but how far down will the Auckland house price go?
Judging from house price drop trends in Australian markets, the decline in the average Auckland house price will hit 4-5 per cent or thereabouts. According to recent statistics, the average asking house price in Sydney has gone down nearly 5 per cent for the first time in 6 years. If that’s something to go by, Auckland house buyers are in for a special treat.
Median Auckland House Prices
According to figures from Barfoot & Thompson, the median Auckland house price peaked at around $900,000. In the past couple of months, however, the median house price has fallen to $835,000. Interestingly, the median Auckland house price has vacillated up and down for more than 21 months. From that, it is safe to say that the median house prices in Auckland will continue to fluctuate instead of following a steady decline.
Auckland house buyers, however, should note that the median price is very volatile and can be affected by the type of properties closed. For instance, if more expensive homes are sold in a particular month, the median house price will tend to be higher than normal. If you intend to sell your house in Auckland, don’t be worried about the falling median house prices. In fact, according to the House Price Index, home values in Auckland have actually gone up 0.9%.
Government Policy Changes Hurt House Prices
A section of property analysts thinks that new Government policies might have played a role in the continued decline in Auckland house prices. Newly introduced policies like restricted foreign ownership and tougher immigration rules will certainly affect house prices in Auckland and the rest of the country.
Unfortunately, banks and top-tier lending institutions will become stricter and introduce higher interests on home loans. Consequently, Auckland house buyers, especially first time buyers, will find it harder and harder to buy a home. Higher interest rates coupled with tighter application process will likely hit the Auckland house price too.
But not all is gloom and doom for those looking to sell a house in Auckland. There several different ways they can still get good value for their investment. For one, they can sell their properties directly to property investors who are willing to pay handsomely.
Auckland House Price vs. Average Income
For long, analysts have agreed that house prices in Auckland seemed a little higher compared to average income for a Kiwi household. More importantly, house values have been ridiculously high relative to rents. This explains why Auckland home values have been stagnant for the past 24 months or so. It is only that the prices have fallen in the past few months as the market undergoes price correction.
According to Nick Tuffley, a senior economist at ASB, Auckland house buyers should expect the prices to remain relatively flat over a period of two or more years, with slight rises and falls in between. Of course, recent changes in government policy might impact negatively on the house prices, and hurt your chances of getting premium when you sell your house in Auckland.Do You Want To Sell Us Your house?
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