Cities are driving the residential property price rise in New Zealand, leaving the rest of the country behind, according to a new report.
A two tier real estate market is emerging with the main centres of Auckland, Wellington and Christchurch performing well while rural areas face an extended property market hangover, says the latest market report from real estate.co.nz.
The November New Zealand Property Report shows an ongoing shortage in properties listed in the main centres, with rural New Zealand being hit with slower sales coupled with a swelling of inventory levels.
‘While national price expectations continue to rise, this is mainly driven by the Auckland market. In the provinces by contrast, there were slow sales during October and November,’ said CEO Alister Helm.
The number of listings nationally rose 2% from October and 4% from November 2008, to 13,857. The national average asking price though last month was $419,586, only marginally up from October and a 2% rise on the previous three months.
The steady growth in listings during the past three months had begun to outpace the rate of sales of property across the country, leading to the growth in inventory levels, the report said.
For the country as a whole the pendulum had swung in the direction of a buyers’ market as the inventory of property on the market was being bolstered by rises in new listings which was meeting a steady, yet uninspiring, sales level, the report said.
Of 19 regions covered in the survey, 11 showed inventory levels running significantly above long term averages. The only places reversing this trend are the three metropolitan regions of Auckland, Wellington and Canterbury all of which are showing inventory levels well below long term averages and well below the national average.
The three metropolitan regions were showing characteristics more akin to a sellers’ market, the report said.
Meanwhile it is set to cost more to sell a property in New Zealand as real estate agents prepare to increase commissions due to extra compliance costs from the new real estate laws.
The average commission is about 3.95% of a property’s sale price, plus a base fee of about $550. Some agents are increasing this to $750 in the New Year. It could result in more people opting to sell privately.