Another housing market milestone: Asking prices hit all time high for fifth month running

New Zealand's housing market has hit another milestone, as Trade Me Property reports the national average asking price has reached an all-time high for the fifth month in a row.

The company released its Price Index for January on Thursday, showing year-on-year demand nationwide was up 15 percent to $769,000 although supply is dwindling.

"We haven't seen a record-breaking streak like this before, with the property market showing no sign of slowing down," sales director Gavin Lloyd said.

"While this is great news for homeowners, it will be hard to hear for prospective buyers. Particularly those trying to enter the market for the first time who have felt no relief over the last few months."

New records were set for average asking prices in all regions apart from Auckland and Otago.

The biggest year-on-year increases in average asking prices were seen in the Manawatu/Whanganui (+21 percent), Gisborne (+25 percent) and Wellington (+14 percent).

Lloyd said Auckland may not have recorded a new high due to an increase in supply in the region.

"When compared with January last year, we saw a 5 percent increase in properties listed for sale in the Auckland region last month," he said.

"This makes Auckland the only region that saw a year-on-year increase in supply, with every other region seeing a drop of at least 4 per cent."

The average asking price in the region reached $1,006,900 last month after increasing 9 percent from January 2020. 

Lloyd said the Auckland market may slow down even further in February as a result of the level 3 lockdown which ended on Wednesday night.

But while demand for property increased by 15 percent year-on-year, supply has been a hindering factor for those wanting to buy - it was down 18 percent.

"As we have seen consistently over the past few months, demand outstripped supply in January which put pressure on the market and pushed prices up," Lloyd said.

The analysis found supply was particularly an issue in Wellington, where the number of properties for sale dropped by 27 percent in January 2021 when compared with the same month in 2020.

Lloyd said it's tough for first home buyers. 

"Kiwis trying to take their first step into the property market in Wellington are not only facing record-breaking prices, but there's a lot less stock on the market and more people trying to buy. Unfortunately for prospective first time buyers, unless this situation changes it will only get tougher."

January's most popular property listing was a $550,000 three-bedroom house on Ngaio Gorge Road in Ngaio, Wellington that received 524 watchlists in its first two days on the Trade Me website.