TODAY |

Auckland property prices experience biggest 'slump' in five years

A drop in overseas buyers has seen Auckland property prices hit a "slump", experiencing the biggest drop in five years.

The numbers fell 1.9 per cent to $901,650 - the largest year-on-year percentage decrease since 2014, according to the latest Trade Me property price index.

Head of Trade Me Property, Nigel Jeffries, said in a statement that while this decline may seem relatively small, it shows that after years of high growth the Auckland property market has "hit a slump".

"Property prices in the region have been flat for a number of months but now it seems the Auckland property bubble is losing air and prices are on the decline.

"With the Government's restrictions on foreign buyers and new regulations for landlords, the Auckland property market is seeing less overseas buyers and investors which is cooling property prices," Mr Jeffries said.

Some of Auckland's popular inner-city suburbs experienced a dip in property prices last month, including Parnell which fell 14.8 per cent to $1,436,250 and Ponsonby which dipped 4.1 per cent to $1,607,750.

The average asking price in Remuera also softened in May, dropping 7.8 per cent to $1,957,100 while Mission Bay saw an 8.7 per cent drop to $1,645,300.

"When we look at the types of properties that are selling in the super-city, apartments are the new favourite property type for Aucklanders with a 19 per cent year-on-year increase in the number of apartments sold in May," Mr Jeffries said. "This surge of interest in apartment living has pushed the asking price up 11 per cent year-on-year to $680,350."

However, there is still interest in the Auckland market with the average number of listing views up 2.3 per cent on May last year.

"The demand is there but buyers are unwilling to pay the huge prices that could be demanded 12 months ago - sellers will need to reset their expectations a little at the moment or hold on until prices track north again," Mr Jeffries said.

But while Auckland is slipping, Wellington’s average asking prices were increasing.

"Property prices in the capital have continued their record-breaking streak after the average asking price rose 11.6 per cent year-on-year to $658,250 - an annual increase of $68,000," Mr Jeffries said, adding that property prices in the Wellington region took off in mid-2016 and have showed no sign of slowing since.

Otago's property market also went "gangbusters" last month - shooting up 11.3 per cent on 2018 to reach a record average asking price of $591,750.

Over the whole country though, the national average asking price fell 1.5 per cent on April to $663,800 in May.

"New residential land under development in Auckland, New Zealand. Shortages of housing in the city means new subdivisions are quickly filled. Shortage of housing is also leading to high house prices. This is Kensington Park north of Auckland. Modern infill compact housing."
Houses in Auckland (file picture). Source: istock.com