Feature article
Which property markets are growing fastest?
Gavin Lloyd talks through the latest numbers
Last updated: 15 May 2024
The cautious optimism about a halt in sliding property values across Aotearoa post election has well and truly vanished. The month-on-month gains seen across many regions earlier in 2024 have been replaced by little movement and in some regions, declines.
The driving force behind recent trends is the shift towards a real buyers market with no “FOMO” (fear of missing out) impacting buyers’ decision making. The recent introduction of regulatory changes by the government, along with the upcoming easing of LVRs (loan to value ratios) are yet to have any meaningful impact on the market. When combined with high interest rates and enhanced buyer choice due to the high volume of new listings, it is no surprise that we have seen subdued average asking prices.
So what markets have grown over the last 12 months?
The South Island is the standout when looking at regions where we have seen year-on-year growth. This is underpinned by a consistent Canterbury market that continues to show resilience post earthquake but the other three regions which have shown growth through a challenging market have been Marlborough, Southland and Otago. Certainly, this is in contrast to most of the North Island, where most regions have fallen behind where they were 12 months ago.
Marlborough has been a standout for the past 24 months with average asking prices pushing through the $700k barrier and continuing to climb to a record high of $781,000 back in March this year. This is up significantly from the $532k average asking price four years ago, in March 2020. It would appear that Marlborough has certainly been a location that has benefited from the regional shift we have seen post Covid. This is evident in the job market in the region with both the number of roles advertised and the salary increases being some of the highest we have seen on Trade Me Jobs.
The deep south has also been particularly resilient. Southland’s average asking price is up 4.9% on May 2023, predominantly driven by Invercargill where its recovery has been rapid through both the spring and summer selling seasons. Otago is another market that has remained strong; Dunedin has been stable compared to areas across Aotearoa of a similar size but the Queenstown Lakes continues to buck the national trend with record average asking prices set through this summer period, although this does now seem to be trending down.
What does winter have in store for average asking prices?
As mentioned at the start, the current setup with high interest rates and plenty of choice for buyers is set to continue for the winter period. If anything, we might even see more listings come to Trade Me Property during July as the shortening of the Brightline Test comes into play. Given these circumstances it is safe to assume that any growth in average asking prices will be subdued. That said, as we have seen there will always be exceptions and some regions and suburbs could continue to see growth.
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