New Zealand house prices are moving north as the property market springs into action. The average property value in Auckland was up 1.3% over the last three months, with values in the regions moving ahead at an even faster rate. While Auckland is still more affordable than it was a year ago, national values are up on an annual basis and first home-owners are struggling to see a way forward.
According to data just released by QV, the average New Zealand property value increased 3.3% from November 2018 to $704,072. While the average value in Auckland declined over the same period by 1.2%, a turnaround of 1.3% over the last quarter sees property values sitting at $1.038 million. According to separate data from Trade Me, the average national asking price increased 2.4% for the year to $678,950, which is a massive 62% higher than it was five years ago.
According to Trade Me's Property Price Index, there is significant movement in the regions when it comes to asking prices. Not only did the regions perform strongly, but eight of the nation's 15 regions reached into record territory. The strongest performing regions were were the Bay of Plenty, Canterbury, Hawke's Bay, Manawatu/Whanganui, Nelson/Tasman, Northland, Otago, Southland, Waikato, and Wellington.
The national market is getting hotter with the weather, with the typical slowdown over Christmas likely to reverse as the optimism of a new year takes hold. According to Nigel Jeffries from TradeMe, sellers have already responded to a surge in demand during October, with listings up 3.1% in November on the previous month: "We expect house-hunting to ease off as we head into the Christmas period, though typically we see a big spike in views come January and if the current price trend persists, we could be headed for a record summer."
New heat in the market is not good news for everyone, as an increasing number of Kiwis see homeownership as an unachievable dream. According to new data from research firm Ipsos, 61% of the 610 people surveyed said they could not afford to buy a house in their local property market. When the same question was asked across the world, the global average was just 42%. As you might expect, pessimism is strongest among young people and those who earn below the national average.
As Auckland recovers from its mini slump and the regions join the party, we could see further momentum moving into 2020. According to David Conford from QV, there are multiple reasons for the current sense of optimism in the air: "most notably because of the eased mortgage serviceability tests used by the banks. Indeed, this easing has had a significant and immediate effect in terms of allowing more borrowers to access finance... However, the solid economy – especially low unemployment – and favourable mortgage rates are playing a key housing market role too."