PROPERTY MARKET UPDATE

PROPERTY MARKET DEFYING EXPECTATIONS WITH VOLUMES AND PRICES UP

B Y BINDI NORWELL, REINZ CEO

The number of residential properties sold in July across New Zealand increased by 24.6% from the same time last year (from 6,303 to 7,854) – the highest number of properties sold in a July month for 5 years, according to the latest data from the Real Estate Institute of New Zealand (REINZ).

For New Zealand excluding Auckland, the number of properties sold increased by 21.5% when compared to the same time last year (from 4,328 to 5,258) – the highest for the month of July in 15 years.

In Auckland, the number of properties sold in July increased by 30.3% year-on-year (from 1,992 to 2,596) –the highest for the month of July in 5 years.

All regions, bar Gisborne and Marlborough, saw a yearon-year double-digit percentage increases in sales volumes – the first time we’ve seen this since April 2016.

Bindi Norwell, Chief Executive at REINZ says: “New Zealand’s property market continued to defy expectations in July with sales volumes increasing by 24.6% when compared to the same time last year.

“This was the largest annual percentage increase in sales volumes we’ve seen for the country since September 2015, highlighting just how confident the market was during July.

“Even though anecdotally we’ve had a great start to August, the real question now, is how long this can be sustained for? Particularly now Auckland has gone back into Level 3,” continues Norwell.

“Focusing on the July results, the only region in the country not to see an uplift in sales volumes was Gisborne, which saw the number of sales fall by 38.9% when compared to the same time last year. With just over 100 new listings coming onto the market over the last three months, and a total inventory of just 7 weeks, it’s not entirely surprising that sales have fallen in the region,” points out Norwell.

“Part of the sales volumes can be attributed to postCOVID pent up demand; but underpinning this activity during July was strong levels of interest and engagement from all buyer levels including first home buyers, investors and families looking to upgrade their property,” she continues.

Median house prices across New Zealand increased by 14.8% in July to $660,000, up from $575,000 in July 2019 and up from $638,000 in June (a 3.4% lift).

Median house prices for New Zealand excluding Auckland increased by 15.3% to a new record median price of $559,000, up from

$485,000 in July last year and up from $540,000 in June this year.

Additionally, Auckland’s median house prices increased by 11.5% to $920,000 up from $825,000 at the same time last year, but down 0.1% from June this year.

“July marked 106 months in a row of year-on-year median prices increases for the country and every region in the country saw an increase in median house prices during the month. Additionally, New Zealand excluding Auckland and four regions – Waikato, Gisborne, Manawatu/Wanganui and Taranaki – saw record median prices achieved. “Even Queenstown-Lakes which everyone predicted would be one of the most hard-hit regions due to a lack of international tourists saw a record median price for the District in July of $1,100,000 up from the prior record set in March 2020 of $1,080,000. It’s a similar picture in Rotorua, where median prices are up 9.4% year-on-year to $487,000. Additionally, Dunedin was predicted to be hard-hit due to a lack of investors, but median prices are up 10.8% annually to $515,000,” says Norwell.

“Other record median prices of note include Kaipara District in Northland (+119% annually to $690,000), Invercargill City (+21.1% annually to $369,500) and Kapiti Coast District (+19.2% annually to $695,000),” points out Norwell. “Looking at Auckland, every area in the region saw a solid uplift in median prices during July compared to a year ago, and Manukau City had a record median price of $928,000 up from the prior record set in March this year of $920,000,” she continues. “Economist and property experts across the country will be keeping an even closer eye on the housing market now we’ve moved back up the Alert Level system. If the same pattern occurs as did during the last lockdown, we would expect to see prices hold again post lockdown – although time will tell,” continues Norwell.

The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 9.4% year-on-year to 3,021. The HPI for New Zealand excluding Auckland increased 9.5% from July 2019 to 2,998 and Auckland’s HPI increased

A N N U A L M E D I A N PRICE CHANGES AUCKLAND 11.5% 17.1% $ NORTHLAND 16.8% BAY OF PLENTY 15.6% $ $ Record Median Price $ WAIKATO 36.0% 23.9% $ GISBORNE

NATIONAL MEDIAN PRICE: TARANAKI 19.6% 17.5% $660,000 9.3% MANAWATU / WANGANUI HAWKE’S BAY 14.8% NELSON 14.2% 9.2% WELLINGTON 10.6% 34 MEDIAN DAYS TO SELL: WEST COAST 27.8% TASMAN MARLBOROUGH 6.7% CANTERBURY Source: REINZ Monthly Property Report 14 August 2020. SOUTHLAND 20.5% OTAGO 8.8%

9.2% yearon-year to 3,050. In July, the median number of days to sell a property nationally decreased 7 days from 41 to 34 when compared to July 2019, the lowest for the month of July in 4 years.

For New Zealand excluding Auckland, the median days to sell decreased by 6 days from 39 to 33, the lowest for the month of July in 4 years.

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