Residential property vendors continue to reduce their asking prices as the volume of houses for sale remains high over winter.
The national average asking price of residential properties available for sale on property website Realestate.co.nz was $828,401 in June, down $23,887, or 3%, from $852,288 in May.
Average asking prices declined in all main centres in June compared to May. The only districts where asking prices increased for the month were the smaller provincial centres of Coromandel, Central North Island, Gisborne, Nelson, Central Otago-Lakes and Southland.
In Auckland, the country's largest housing market by far, the average asking price declined to $982,679 in June, down from $1,023,760 in May, a drop of $41,081 (-4%).
That was the first time this year Auckland's average asking price has been below $1 million.
In the Wellington region the average asking price declined from $836,429 in May to $791,128, a drop of $45,301 for the month (-5.4%). The first graph below shows the longer term asking price trends in the main centres.
The total amount of stock for sale on the website declined for the third month in a row to 32,384 properties for sale at the end of June.
That decline was expected because stock levels always decline over winter as market activity cools along with the weather. See the second graph below.
However, stock levels were still up 3.6% compared to June last year and up 31.4% compared to June 2023, with the amount of stock for sale remaining at its highest level since 2014.
All of which suggests buyers will continue to have the upper hand in a very well stocked market, and vendors will need to be very realistic in their price expectations.
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30 Comments
Ouch, that's a serious drop in asking prices!
I think it always falls in winter, but not by this magnitude... AKL -4% WGTN is becoming a rout
https://www.nzherald.co.nz/business/centrix-credit-indicator-reveals-ha…
Welly had been Govt Service/Contractor bloat + stupidy low interest rates. Add in the lack of uptodate infrastructure from successive Councils asleep at the wheel, why would you live there. Anyone buying at peak could easily be locked in for the next twenty years just to get their $$ back.
They did it to themselves.
Wellington is depressed but no more than Auckland. If you look at the weeks of inventory Wellington is 14 weeks compared to Auckland's 29. I think these figures are a little captured by the stock - with a large number of new townhouses and landlords quitting their investment properties both of which imply a lower value stock.
As no one will pay ask in this market it means a decent fall is coming over summer
Reality is finally dismantling the captured sensationalist MSM property headlines.
Banks are shielding stressed borrowers and holding marginal sellers back from adding stressed assets to a bloated winter stock pile. Forced sales in a weak market risk losses to the bank’s loan recovery.
Further price declines compounding four years of real capital losses, undermine hopes for tax free capital gains among buyers. Buyers are growing increasingly cautious and in no rush to sign up to a lifetime of housing debt as rising living costs erode their mortgage repayment capacity.
Time to reflect on the narratives the vested interests have pushed to the public unsupported by verifiable data or reliable evidence:
- "Inflation is transitory"
- "Survive to '25"
- "We've reached the bottom of the market" (repeated ad nauseum)
Now is the time to put in a low offer (and don't ask the agent if your figure will be ok), ignore them send in the offer and get proof its been presented
IMO the South Island looking quite stable while Auckland looks vulnerable to further decreases
Nelson is weak
About time too. It seems to have gone against the odds for a long time.
and wet. Insurance and rates outlook can't be good.
It'll be fine for Nelson City, it is Tasman rates which will take a hit and they are already a massive district with huge costs for maintenance, numerous sewer stations, water catchments to manage and a new damn just for orchardists for dry years that those living on the waimea plains are forced to pay for regardless if they use it. All those large properties in the Motueka Valley on the other hand (sought after, affordable and good growing climate) will be battered with insurance costs. Hard reading that many had mere hours to get out and watch their homes be inundated.
Indeed. If overseas cash ever decides to pull out of the QT Lakes region then it could be absolute carnage down there.
See what happens.
Australians and Singaporeans are buying on a regular basis in the QT lakes - following the money is a good strategy
NEVER ask the REA if the offer is OK. That's basically asking them if the amount they will get for their commission is big enough, and they will always suck you for more. Remember they work for the seller, not the buyer. They're trying to con you into buying on their terms.
True story; over 20 years ago I had a portfolio of rental properties, and pretty much used one REA, who incidentally I grew up with. This is small town NZ, the mighty Whangavegas. A four bedroom older house came on the market and he rang me to let me know it was there. I went and took a detailed look at it, noting it needed some work. I did my sums on the property, knew its sale history, and came up with a price I was prepared to pay, and told the REA to put an offer in as a cash bid. When he heard my offer he told me he would be embarrassed to make that offer. the offer was more than 30% less than they asked. My response was he did not need to be embarrassed as he was just the messenger. The sellers could take or leave the offer, and I'll go look at other properties. Two hours later he rang me back to tell me the sellers had accepted the offer!
That he tried to do what he did was technically illegal as REAs are required to present all offers on a property, irrespective of whether they think they're realistic. Sometimes they shaft punters though by effectively creating a Dutch auction, presenting multiple offers at the same time. I think that's technically illegal too?
Yep. That is their job. In a sellers market you kinda have to suck up their self entitled elitism for having secured the listing. In a buyers market they have to work harder and actually be professional each way.
Alt view is ...You make you money when you buy (price makes sence). But...they make nothing unless you buy.
This market crash is picking up speed....wow.
At this rate of decline, most rentals will be getting 10% yields by 2026/2027!
These yields will be required, to cover the massive increases in rates, water, insurances, compliance that are seen to have no end to their increases, year on year........
Bring on the 10% yields!
Current gumby bagholders be crying!
MSM is only starting to suggest declines or flat market.
I'd expect to see an over reaction as the less informed (being most) discover the trend.
Robert Shiller (author of Irrational Exuberance) showed that real estate markets are highly subject to social contagion, media feedback loops, and speculative belief systems.
Plenty of downhill to come.
The NZ property market had a hell case of SEVERE IRRATIONAL EXHUBERANCE, for the last 40 Years.
This is one hell of a hangover, as the market flipped a 180 degree in 2021.
One fact of all Markets reigns supreme: All Booms Bust, Completely.
- This bust has just begun
Canterbury holding pretty flat across the last three years. Possibly the only major city not following the trend.
Due to the well supplied market the speculative bubble never took off there like it did in other places. So more normal market conditions.
If we think existing houses are over priced, do the sums on buying a section and building a modest dwelling, it may surprise.
In a market glut, as we wiĺl have for some time, sale prices can and do indeed go below production prices.
So the new product price is not a restraint, in a crashing market.
Land prices still and will have a long way to fall. Oooooodels of vacant dirt in NZ.
Tell ya builder he's dreeeeamin' with those prices.
In a crashing property market high building costs are an accelerant to the crash, because the they remove developers from the buying pool and prevent any sort of price floor occurring.
Good point. Many a recently qualified tradie will pack their tools and fly west. Those with companies, mortgages and kids at school will be reluctant/unable to drop prices indeed making the crisis worse.
Don't disagree with that but the big difference is ....its a NEW house.
New with monolithic cladding was great in the 1990's as well, until.........
Like the current new ones that get too hot in summer
Buyer beware applies regardless.
The issue is the land value. And successive recent Governments have been successful at increasing land supply, by up zoning. Although I would also argue we have trained ourselves out of how to build cost-effectively because we were always confident that, whatever it cost it would be worth more in a year.
I think there is a lot of people sitting on land which is going to be devalued by the destressed sales.
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