Georgina Bond
Auckland’s average asking price for residential property has fallen below $1 million for the first time in six years – another sign of a housing market where buyers are spoilt for choice.
The city’s average asking price dropped to $993,562 in September, according to the latest data from realestate.co.nz. That’s more than $280,000 below the $1.275 million peak reached in January 2022 and the first time Auckland’s average has fallen below $1 million since 2020.
It comes as the number of listings in the country’s largest housing market continues to rise. Almost 14,000 Auckland homes were on the market in September, up 13.8% on the same time last year. More than 3,500 new listings also came onto the market during the month, up 7.7%.
Realestate.co.nz general manager of customer Vanessa Williams says dropping back below $1 million is significant in a market where seven-figure asking prices had become commonplace.
“For a long time, a million-dollar average asking price felt almost synonymous with Auckland, so dropping back below that level is notable. But it also creates opportunity, particularly for buyers who’ve been waiting on the sidelines,” she says.
“The combination of almost 14,000 properties on the market and asking prices well below their peak has created one of the most buyer-friendly markets the city has seen in years.”
Separate data released by property data company Cotality today tells a similar story.
Its latest Home Value Index fell 0.3% in September, the sixth consecutive month that property values have fallen. The national median value is now $797,078, down 1.3% from a year ago.
Auckland values fell 0.5% during September, with falls across all parts of the city.
Cotality chief property economist Kelvin Davidson says buyers still have most of the negotiating power, with plenty to choose from and little pressure to make a quick decision. While many sellers are not being forced to accept big discounts, economic uncertainty is making people cautious and fewer homes are changing hands, he says.
Plenty of choice
The same scenario is playing out across the country, with the number of homes on the market continuing to build as sales slow. There were 34,001 properties for sale nationally in September, 10.7% more than a year ago.
BNZ chief economist Mike Jones says new listings have continued to grow, even as the number of homes changing hands has slowed.
“Consequently, the stock of unsold inventory on the market continues to gradually increase. Ample supply means prospective buyers have more choice and time, and there is little to no pressure on house prices to rise,” Jones says.
The national average asking price was $855,245 in September, down just 0.2% from a year ago. New listings were also largely unchanged, up 0.8% year-on-year to 9,466.
Williams says the small increase suggests the looming election has not stopped people putting their homes on the market. But with plenty of homes already for sale, vendors are having to work harder to get buyers’ attention, making realistic pricing increasingly important.
Rebound still some way off
For buyers, one of the biggest changes has been that homes have become more affordable compared with the highs of the pandemic property boom.
Davidson says the increase in the number of listings has helped, particularly in Auckland, and first-home buyers have been making the most of the conditions.
And Cotality isn’t expecting prices to suddenly take off again. Higher mortgage rates, economic uncertainty and the large number of homes for sale are likely to keep a lid on property values for some time yet, Davidson says.
“First-home buyers remain highly active and continue to benefit from favourable purchasing conditions, including improved affordability and greater choice.”
But people looking to sell one home and buy another are being more cautious, while many investors with mortgages are staying out of the market. Davidson says jobs and people’s confidence about keeping them will play a big part in what happens next.
“Until labour market conditions and job security improve more meaningfully, sustained house price growth appears unlikely. At this stage, a return to consistently rising values still looks some way off.”
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