Modest decline continues
Trade Me’s Property Price Index for May indicated a continued decline in property prices, with a 2.3% drop from the previous month, bringing the average asking price down to $857,800.
This marks the second consecutive month of declines.
Winter cools market trends
Casey Wylde (pictured above), Trade Me spokesperson, noted the seasonal trend affecting property prices.
“Seeing prices dip slightly isn't completely unexpected heading into winter,” Wylde said.
“Year-on-year prices continue to show a small increase of 0.9%, maintaining an overall upward trend for the fourth month in a row. However, the pace of growth appears to be slowing following a peak in March at 2.2%.
“The median days on site increased to 68 days for May, an increase of six days from April. When properties remain on the market for longer, we generally start to see sellers adjusting their expectations and asking price.”
Largest cities see biggest drops
The decline in asking prices was most pronounced among larger properties in major cities.
In Auckland, the average asking price for homes with five or more bedrooms plummeted by 9.9% compared to the same period last year. Similar trends were observed in Wellington and Christchurch, where prices fell by 9.4% and 7.5%, respectively.
Despite the falling prices, market activity has increased, with demand rising by 7% and supply up by 16% from the previous month. Significant increases in supply were noted in Gisborne and Auckland, with jumps of 45% and 24% respectively.
Impact of economic factors
Economic pressures such as higher interest rates and rising council rates are impacting homeowners.
Wylde commented on the financial adjustments facing many.
“Many homeowners are currently refixing their mortgages, and this often means reconsidering what kind of home they can afford at those higher rates,” she said.
Read the Trade Me media release here.
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