J U N E
M A R K E T
2 0 2 1
P U L S E
C21
PUBLISHER Century 21 New Zealand Ltd
CONTRIBUTORS Derryn Mayne Cameron Brewer Wendy Alexander
EDITORIAL ENQUIRIES Century 21 New Zealand +64 9414 6041
ADVERTISING ENQUIRIES Century 21 New Zealand +64 9414 6041
WELCOME TO THE
JUNE 2021 ISSUE OF
C21 MARKET PULSE
DISCLAIMER We have in preparing this information used our best endeavours to ensure that the information contained therein is true and accurate, but accept no responsibility and disclaim all liability in respect of any errors, inaccuracies or misstatements contained herein. Prospective buyers and sellers should make their own enquiries to verify the information contained herein. All information contained in the CENTURY 21 New Zealand Ltd website is provided as a convenience to clients. All links to property prices displayed on the website are current at the time of issue, but may change at any time and are subject to availability. For more information on our Privacy Policy please refer to: www.century21.com.au/privacy
C O N T E N T S J U N E
C21 NEW ZEALAND NEWS
02
2 0 2 1
REGIONS AND BACHES
04
Budget failed to make buying a house easier for
Two key things making the regions and baches doable.
young kiwis.
Cameron Brewer
Century 21 New Zealand, Derryn Mayne
PROPERTY MARKET UPDATE
HOUSE PRICES
03
House price rises continue; Auckland hits new record
Flatlining house prices isn’t going to happen.
median price again.
Cameron Brewer
Acting CEO, REINZ, Wendy Alexander
C21 MARKET PULSE
01
CENTURY 21
06
C21 NEW ZEAL AND NEWS
BUDGET FAILED TO MAKE BUYING A HOUSE EASIER FOR YOUNG KIWIS Last month I noted that first-home buyers would be watching the Government’s 2021 Budget with bated breath. No one was expecting a free lunch, but some workable policies and plans that ensured a leg up on the property ladder were anticipated by many. Unfortunately, no such luck. Well done to the Government on funding its earlier housing initiatives, but
B Y D E R R Y N M AY N E , CENTURY 21 NEW ZEALAND
Robertson confirmed that Budget
Another initiative could’ve been
2021 will help deliver more housing
interest-free government loans
supply, with a strong focus on
for deposits on first homes – like
lifting Maori homeownership rates
student loans in tertiary education.
announced.
It’s those kinds of things that
Homeownership rates for Maori
would’ve made a real difference.
have always been much lower than
Barriers to entry remain. Young
the rest of the population, so this
Kiwis simply can’t break into the
is really positive. I was also hoping
property market, despite many
to see more for first-home buyers
easily able to potentially service a
generally, with some bold moves to
mortgage rather than paying high
actually get them on the property
rents.
ladder.
What’s more, as is well established,
Sure, the Government’s already
owning your own house is a huge
tinkered with the likes of HomeStart
‘wellbeing’ advantage for Kiwis at
Grants and First Home Loans, but in
the end of their working lives.
for most first-home buyers Budget
this market much more is required.
2021 will make little difference.
The Finance Minister has long
initiatives announced so far may
The Budget brought to life
promised to ‘tilt the balance more
have individual merit, collectively
towards first-home buyers’ but
they’re still not enough to
already announced in recent
Budget 2021 has not achieved that.
substantially lift the country’s
months. However, it did little to help
He could’ve announced partnership
young Kiwis pull together a deposit
models such as ‘rent to buy’
or secure a mortgage – both of
schemes or that the Government
which are increasingly difficult.
would act as loan guarantor for
In his delivery to Parliament on
eligible first-home buyers.
measures the Government has
20 May, Finance Minister Grant
C21 MARKET PULSE
02
CENTURY 21
While the Government’s housing
overall property ownership rates. Budget 2021 could’ve changed that, but it didn’t.
www.century21.co.nz
HOUSE PRICES
FLATLINING HOUSE PRICES ISN’T GOING TO HAPPEN Treasury’s prediction that annual house price growth will fall to just 0.9% in the coming year is looking less and less likely as the country rolls into another month of unrelenting housing demand and strong sales prices.
the June 2021 quarter to 0.9% by
19.1%. What’s more, nine out of 16
June 2022.
regions reached record median
The Century 21 spokesperson says the supposed dramatic flatlining
“We all expect the easing of
time when the country reopens
house prices, but like REINZ we
to tourists and migrants, higher
remain surprised at the very low
population growth is forecast, and continued low
level of nationwide price growth forecast out of
interest rates are
Wellington. REINZ “We all know predicts it will be Treasury is more around the conservative when it comes to economic 3% to 5% mark predictions, but in reality, which sounds demand remains the driver more likely. here spurred along by the “For sure the fact that New Zealand is Government’s still tens of thousands of houses short,” tax changes and
expected. “We all know
move to more sustainable levels
Treasury is
after an unexpected frenzy over the
conservative
past 12 months. However, less than
when it comes
one percent in the next 12 months
to economic
is a big call when buyer demand
predictions, but
remains so strong, not to mention
in reality, demand
our borders and economy only
remains the driver
opening wider,” says Century 21
here spurred along by
New Zealand’s Derryn Mayne.
the fact that New Zealand is
Treasury expects the Government’s
$1,125,000 for the first time.
of house prices will come at a
“House prices will undoubtedly
Announced on Budget Day,
prices, including Auckland reaching
the re-introduction of LVRs are already starting to act as a handbrake.
still tens of thousands of houses
New Zealand’s lack of housing
short,” says Ms Mayne.
supply, however, will ultimately
recent housing policies - including
She notes the Government’s
extending the bright-line tax
slowdown prediction came just a
test and removing of interest
week after REINZ reported that
deductibility - will contribute to
April saw median house prices
price growth falling from 17.3% in
across New Zealand increase by
C21 MARKET PULSE
03
CENTURY 21
prove the Treasury economists wrong. There’s no way the coming 12 months in real estate will be lacklustre,” says Derryn Mayne. www.century21.co.nz
REGIONS & BACHES
TWO KEY THINGS MAKING THE REGIONS AND BACHES DOABLE With the country’s real estate market still roaring along much is attributed to the lack of housing supply and record-low interest rates. One real estate boss, however, says two other key factors are also adding fuel to the fire. Century 21 New Zealand’s Derryn Mayne says the growing acceptance
for holidaymakers as mum, dad or
office job to work from home self-
both can often still work if Wi-Fi’s
employed.
available.
“A decade or two ago Kiwis would
“Covid has seen more Kiwis
do a bit of could consulting or
exploring their own backyard,
contracting towards the end of their
but it has also fast-tracked
working life or when their kids were
companies and organisations’ digital
pre-school. Now, we’re seeing many
enablement and acceptance. In
more Kiwis working from home
short, employers and employees
mid-career and mid-life.
have got used to working from home and that has changed people’s mindsets as to where they can live,” says Ms Mayne.
“Greater flexibility around work has been a key factor in the regions’ strong real estate resurgence. At the same time, causal rental
of remote working and the arrival
She says REINZ’s monthly statistics
income has delivered the beach
of holiday home management and
on median house price sales have
house dream to many more. All
marketing companies have made
been incredibly strong for regional
said and done, these changes have
living in the regions and buying a
New Zealand, driven partly by city-
provided greater opportunities for
bach much more achievable.
dwellers seeking an easier lifestyle
many Kiwis and that’s positive,” says
adding to local demand.
Derryn Mayne.
“Companies like Bookabach, Bachcare and Airbnb have meant
“Century 21 is seeing people move
more families can now service
from Auckland and Hamilton to
a second mortgage, thanks to a
places like Te Awamutu, Tuakau,
REINZ’s April data highlighted
good income stream many holiday
and Huntly. We’re seeing Wellington
Whanganui’s current market
houses can now attract. Further,
families moving to the Kapiti Coast,
strength. With a median price at
with the borders largely shut, strong
Palmerston North and Whanganui.
$470,000, Whanganui was up by
domestic tourism has only boosted
It’s not because the parents have
37.4 percent from $342,000 in
the appeal of owning a bach you
found new jobs. Rather, it’s because
April last year.
can casually rent out,” says Ms
they can keep their old one!”
Mayne.
Businesses too have adapted to
doing more and more business in
The Century 21 spokesperson says,
greater use of outside consultants
Whanganui, spurred on by a lot
likewise, going to a coastal, river or
and contractors, meaning more
more enquiries about the city.” says
lake property is now more viable
Kiwis mid-career are throwing in the
Tim Kearins - Owner of Century
C21 MARKET PULSE
04
CENTURY 21
CASE STUDY - WHANHANUI
“In the past 12 months we’ve been
Photo: Panoramic view of Whanganui, New Zealand
21 Premier, Palmerston North (pictured above). “Whanganui has enjoyed a strong price lift but it still remains relatively affordable when compared to New Zealand’s main centres. It has some really nice established suburbs with some fantastic old homes. At the same time, it boasts plenty of entry-level housing which more and more firsthome buyers are discovering they can actually afford. “We’ve been seeing more Aucklanders and Wellingtonians moving there, with lifestyle a big factor. Whanganui has some great schools, good civic and recreational amenities, and a growing arts sector. “Our regional cities have long been due a catch-up when it comes to property prices and that has well and truly been happening in the past year or so. “What’s more, I think regional cities, like Whanganui, will keep bubbling away. For as long as rents remain higher than the cost of servicing a mortgage, I can’t see the property market coming to grinding halt despite what Wellington officials may tell us,” says Tim Kearins.
C21 MARKET PULSE
05
CENTURY 21
P R O P E R T Y M A R K E T U P DAT E
HOUSE PRICE RISES CONTINUE; AUCKLAND HITS NEW RECORD MEDIAN PRICE AGAIN
BY W E N DY A L E X A N D E R , REINZ ACTING CEO
Median prices for residential property across New Zealand increased by 32.3% from $620,000 in May 2020 to $820,000 in May 2021, according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand. While it wasn’t a new record, it was
2021. Additionally, South Taranaki
holding strong. Median prices
the highest annual percentage
District saw a new record median
haven’t significantly eased yet as
increase in house prices since
of $405,000. Tasman: with a 21.2%
many had hoped would be the case,
records began; and 5 out of 16
increase from $701,500 in May
and things are certainly not getting
regions reached record median
2020 to $850,000 in May 2021.
any more affordable for first time
prices as did 18 districts.
Canterbury: with a 26.5% increase
buyers.
The median house price for New Zealand excluding Auckland increased by 28.0% from $530,000 in May last year to $678,500 in May 2021. Auckland’s median house price increased by 26.9% from $905,000 in May 2020 to $1,148,000 in May 2021 – another new record for Auckland. Additionally, Papakura District and Waitakere City reached new record median prices of $900,000 and $1,050,000 respectively. In addition to Auckland, 3 other regions reached record median prices and 1 region was a record equal. They were: Taranaki: with a 29.1% increase from $426,000 in May 2020 to $550,000 in May
from $460,000 in May 2020 to $582,000 in May 2021. Additionally, Mackenzie District ($705,000), Selwyn District ($677,500) and Waimate District ($385,000) all saw record median highs. Waikato: with a 21.7% increase from $600,000 in May 2020 to a record equal $730,000 in May 2021. Additionally, Otorohanga District ($535,000), Taupo District ($710,000), Waikato District ($726,000) and Waitomo District ($360,000) all reached record median highs.
“This is underpinned by some very strong results in the REINZ House Price Index (HPI), which reached a new high and represented the highest annual percentage increase in the New Zealand HPI that we’ve seen since records began,” continues Alexander. “Looking at the overall picture, we’re still seeing that the lack of total housing supply is continuing to push up house prices. In May, there were less than 15,000 properties available for sale across the entire country.
Wendy Alexander, Acting Chief
This is the second lowest level of
Executive at REINZ says: “Whilst
total inventory we’ve seen since
we haven’t seen as many record
we began collecting records, and
median prices in May as we’ve
properties are still selling relatively
seen in the past few months, there
quickly for this time of year which is
is no denying that New Zealand’s
when we usually start to see things
residential property market is still
slow down a bit,” she points out.
C21 MARKET PULSE
06
CENTURY 21
ANNUAL ME DIAN PRICE CHANGES $
$
29.2%
26.9%
NORTHLAND
AUCKLAND
Record Median Price
$
$
NATIONAL MEDIAN PRICE:
20.8%
49.4% GISBORNE
38.6%
TARANAKI
32.3%
21.7% WAIKATO
29.1%
$820,000
32.3% BAY OF PLENTY
34.9%
MANAWATU / WANGANUI
HAWKE’S BAY
30.3%
NELSON
MEDIAN DAYS TO SELL:
$
30 33.6%
21.2%
32.7%
TASMAN
WELLINGTON
MARLBOROUGH
26.5%
WEST COAST
$
CANTERBURY
15.9%
32.6%
SOUTHLAND
OTAGO
Source: REINZ Monthly Property Report 15 June 2021 .
“While some of the regions are
Zealand was the highest number of
• Canterbury: +87.8% (from 596
starting to show signs of prices
properties sold in a May month for
to 1,119 – 523 more houses) – the
easing, which will be welcome
3 years with 7,550 properties sold,
highest for a May month in 14 years
news for locals who are looking
a 1.3% uplift from April 2021 and an
to buy, it’s hard to know whether
81.4% increase on May 2020.
this is a direct result of the 23 March announcements or just the usual winter slow down. This is particularly true given that the Auckland market is still forging ahead, with another record median price seen in May. “There are now only two districts in the Auckland Region where the median house price is less than $1 million – Franklin District ($822,000) and Papakura District ($900,000). Auckland City remains the most expensive district in the
For New Zealand excluding Auckland, 4,784 properties sold in May, just two fewer properties than sold in April 2021, but a 60.8% uplift on May 2020. Auckland saw the busiest May month in 5 years with 2,766 properties sold, a 3.7% increase on April 2021 and a 133.4% increase on May 2020.
addition to Auckland, regions with
• Tasman: +112.9% (from 31 to 66 –
points out Alexander. The number of residential properties sold in May across New
to 455 – 195 more houses). Wendy Alexander, Acting Chief Executive at REINZ says: “Last month we saw the highest number of properties sold in a May month for three years with both investors and first home buyers still relatively active in the market despite the
increases in sales volumes. In
North Shore City on $1,330,000.
new record of $1,050,000 in May,”
• Bay of Plenty: +75.0% (from 260
general increase in house prices.
the biggest increases were:
exceeded the $1 million mark with a
– 339 more houses)
In May, all 16 regions saw annual
country at $1,351,000 followed by Even Waitakere City has now
• Waikato: +87.6% (from 387 to 726
35 more houses) • West Coast: +93.8% (from 32 to 62 – 30 more houses) – the fourthhighest May sales count since records began
C21 MARKET PULSE
07
CENTURY 21
Click here to read the full article
Visit: C21.co.nz