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National average asking price of houses for sale in February rises above $500,000 for the first time, while Auckland property hits new high

National average asking price of houses for sale in February rises above $500,000 for the first time, while Auckland property hits new high
Unrealistic expectations ?

The lastest, and generally dubious, monthly real estate trade spriking of 'asking prices' is out today from realestate.co.nz.

Apparently asking prices are rising and the national average asking price is now above $500,000 for the first time.

This is all driven by Auckland average asking prices which are said to now exceed $760,000.

Although it does separate out the changing balance of houses, apartments and lifestyle blocks, its headline totals mixes them together.

But there is no mention of within-region shifts, and no mention of the changing balance of house size/bathrooms/bedrooms.

Consequently the data released can only give a very superficial analysis of how the housing markets are changing.

The best you can say is that asking prices are rising faster in regions that have low stocks of houses for sale - and that would hardly be a surprise to most readers. But the change of inventory levels seems to have little influence as the table below shows - it is the absolute level that drives prices higher.

The other take-away seems to be that 'asking price' changes appear to have little correlation to actual sales price median changes. We will need to wait about ten days to get the February REINZ data, but the year-on-year change data for the prior month reinforces the caution you should have when assessing property website 'asking price' data.

Only at the national level is there any semblance of correlation.

  Av Asking price Inventory weeks REINZ Sales price*
  % y-on-y change # y-on-y change % y-on-y change
  all/house    
Northland +0.4 / -0.4 +5.4 +7.7
Auckland +12.9 / +13.5 -9.2 +16.0
Coromandel +10.0 / +13.6 -90.3  
Waikato +2.2 / +3.2 -4.3 -1.8
Bay of Plenty +1.6 / +4.0 -12.7 -1.8
Gisborne +7.3 / +4.6 +12.0 +3.1
Hawkes Bay +1.2 / +8.3 +7.1 +3.1
Central North Island -7.0 / -9.1 -61.7  
Taranaki +14.3 / +16.5 +2.8 +1.7
Manawatu/Wanganui +1.9 / +6.0 +8.1 +0.9
Wairarapa -0.4 / +2.4 -23.8 -3.7
Wellington -1.0 / -0.2 -3.7 +6.2
       
Nelson/Tasman +0.7 / +1.3 -4.5 -7.4
Marlborough -11.7 / -7.8 -4.3 -7.4
West Coast -12.0 / -8.6 -33.4  
Canterbury +2.6 / +3.5 +6.3 +8.1
Central Otago Lakes -7.0 / -11.5 +3.1 +11.2
Otago +0.5 / +2.7 -2.9 -3.8
Southland -1.9 / +3.4 -8.6 +4.1
       
New Zealand +5.9 / +6.9 -5.9 +6.0

Average apartment asking prices are up +24% from the same month a year ago, a trend that seem to be rising. A mix of larger units coming on to the market at the higher end may be driving this more than like-for-like price rises. In Tauranga the rise is even more impressive, up +34%. However that market shows considerable volatility.

In Wellington, the year-on-year rise is just over +1% and over the past year changes have been very modest.

In Christchurch, the average asking prices in the apartment market is also volitile as units across the range come back on to the market in relatively low volumes.

Canterbury lifestyle block asking prices have actually fallen from the same month a year ago, down -1.3%. Recent fire and drought conditions however may be inhibiting transactions as there are +14% more listings than for the same month a year ago. Listing volumes have jumped since July 2014.

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20 Comments

Since agents and vendors know they can manipulate people into paying more money with auctions it is rare to find a house with an actual asking price.

Maybe their sample size for calculating these "averages" is very small.  Or maybe they only bother writing the price in Chinese these days.

Although they may not make it visible, all listings have a 'price' or 'range', even auction listings. Both Trade Me and realestate.co.nz require it. It is this data that allows search functions to work. It is this data that allows 'asking price' analysis to be done.

David
 
your piece references both "average" and "median" prices. Can you confirm that these terms are being accurately used?

If that is the case, the data is wrong. Most of the search indicators are well below what the actual sell price is.

In my opinion auctions are a bad way to sell; they are good for the agent as it's high pressure on both the buyers and seller and more often than not forces an agreement.  There are lots of people who just won't buy at auction so you cut out some buyers and if you don't make an agreement on auction night people start asking "what's wrong with it".  In my opinion it's best to price by negotiation over a set time frame. 

And in my opinion I prefer to buy at an Auction as it is more transparent than negotiating when all the agent tries to do is get you to raise the price as a buyer and reduce it as a vendor.
It the deal that matters to the agent not the price.
 

Yip, everyone shows their cards at an auction, a buyer may have been willing to pay $800k but if bidding only goes to $750k they'll stop there.  A tender style negotiation and a good agent teases the best price from every potential buyer. 

Yip, everyone shows their cards at an auction, a buyer may have been willing to pay $800k but if bidding only goes to $750k they'll stop there.  A tender style negotiation and a good agent teases the best price from every potential buyer. 

It is my opinion that RE Agents are like the Hawkers one meets in place like Bali.

Let me guess, the profession you're in is the height of saintliness. 

My experience with RE's is I trust them less than second hand car salesmen, if only because the $s are a lot bigger.  Recently however I have noticed that PR spin doctors working for companies are actually even bigger liars. 
Now the word liars may be taken as an offensive word but when someone obfsucates in order to hide teh truth on something that will cause me or mine harm, I treat that just like lying.
Sadly it often comes across or has been my experience that some people will lie to you in order to make a sale (sale can take lots of forms eg a political point of view). Now they can be in many walks of life but RE seems to be one that has enough to make you take pause as it were.
 
 
 
 
 
 

Trusting a RE agent is a bit like putting trust on a 15 years old by giving him/her a bottle of vodka and car key..

The Listing Agent collects more from a successful auctioning than if "price by neg" , where the divide up ratios are different.  Its a perverse form of locking out other agents - and ensuring they (listing agent) get the biggest piece of the pie (dawins theory of evolution applied to Real Agents).  Gamblers theory - if you dont know who the sucker is - your the sucker. and you thought agents were working for you ? - no.  Auctions are the quickest way to a deal, not necessary the best deal. 
Alot of agents themselves go for a tender process.  So whats good for the goose must be good for the gander.
90% of a realestates agents job is in finding another john, not selling thier current listing who are already on the hook - so thats why they have open homes - to get more listings.

Well said and yes, agents are literally paid more commission when they sell via auction.  It's transactional, very little work for the agent and watch out if you dont sell on the night. 
 
The typical buyer who won't take any part in an auction...  60+ boomer, probably got mega bucks and possibly your best buyer, won't even be in the room. 

There does appear to be an effort to get people "on the hook" so they can be sold marketing and other services.

I've definitely noticed an increase in Wellington sales price. Especially in the northern suburbs (Khandallah, Ngaio, etc). The REINZ sales price seems to affirm this. Looks like some Auckland 'trickle down' is arriving.

I've noticed the same thing. Few agents I speak to tell me they're noticing an uptick in buyer interest especially for high quality family homes in best suburbs - Karori, Mt Vic, Roseneath etc. Public sector spending recovering and trickle down from Auckland. About time....
 

possible more of the "I can't believe auckland prices" (ie can't afford to get in, or expecting a bursting bubble)  and so heading for alternative investments.

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