The housing market could be headed for a particularly chilly winter this year, with average asking prices of properties listed for sale on Trade Me Property taking a substantial tumble over the last three months.
The national average asking price for properties advertised for sale on the website has fallen for three consecutive months, to $833,800 in May from $883,800 in February. That's a decline of $50,000 (-5.7%).
Not only are asking prices dropping, but the rate at which they are declining appears to gathering pace.
In April, the national average asking price fell $7500 compared to March, but in May the monthly decline was $21,250.
Around the country 11 regions recorded falls in their average asking prices in May compared to April. Just four regions - Gisborne, Manawatu/Whanganui, Nelson/Tasman and Marlborough - posted increases.
The biggest drop in asking prices was on the West Coast, where there was a month-on-month fall of $51,150 (-9.0%). However, asking prices on the West Coast can be particularly volatile because of the relatively small size of the market.
There were also falls in asking prices in Auckland -$42,650 (-4.1%), Taranaki -$39,900 (-5.8%), Northland -$38,350 (-5.1%), Otago -$23,100 (-2.7%), Wellington Region -$21,750 (-2.8%), Hawke's Bay -$20,650 (-2.8%), Waikato -$15,500 (-1.9%) and Southland -$10,900 (-1.9%).
The remaining regions all had monthly declines of less than $10,000 in May.
Over the three months since February, the biggest slumps in average asking prices have occurred in Auckland -$91,300, Otago -$69,550, Northland -$55,150, Wellington Region -$52,450, Bay of Plenty -$50,750, Gisborne -$41,350, Nelson/Tasman -$35,850, Hawke's Bay -$32,850. Taranaki -$25,500, Waikato -$24,750, Southland -$21,450 and Canterbury -$16,800.
6 Comments
Oh the speculative will be fooping in their pants. Panic order the pepto pills.
https://www.nzherald.co.nz/business/economy/inside-economics-nz-house-p…
looking like a repeat?
If you look at the long-term New Zealand property graph (I’m using one on the US Federal Reserve of St Louis website – which sources Cotality data), then you can see the real extent of the housing slump through the 1970s and 1980s.
House prices surged in the early 70s to peak in late 1975. Then, as mentioned above, they went into a five-year decline.
What is really shocking is that it took another 15 years for them to get back to that peak in real terms.
Wouldn't be a bad thing at all. Some people forget that the money you don't spend on housing goes into anything else (cars, holidays, clothing, restaurants, services, etc.).
Wouldn't be a bad thing at all. Some people forget that the money you don't spend on housing goes into anything else (cars, holidays, clothing, restaurants, services, etc.).
You are correct in that Aotearoa is a spending culture so little is saved. Therefore, less spent on shelter can be allocated to other consumption.
But you also need to consider the psychological impacts of the Ponzi not doing what it's expected to do - go up 7-10% per year. Winter hols to Fiji / Queenie; spa pools; and kitchen renos become harder to justify. Even reaching for the "nice to haves" at the supermarket. You can consider this a "negative wealth effect" and my reckon is that it's ultimately more destructive for the economy than people understand. It's also why Ponzinomics is tolerated and promoted by the ruling elite (and for their own popularity).
I guess we will go back to innovation as is necessary. Create new services, goods, add value, though it will take a good number of years to lose all the hopium of a new property boom again.
Has anyone looked at the correlation between trade me asking prices and actual sale prices?
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