C21 Market Pulse | November 2021 | New Zealand

SPRING IS HERE, MARKET BOUNCES BACK FROM LOCKDOWN

Property market rebounds in October following a September dip as activity increases and prices remain strong, 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.

The number of residentialproperty sales across New Zealanddecreased by 21.7% year-on-year,from 9,185 in October 2020 to 7,190in October 2021. However, therewas a significant increase in salesmonth-on-month — up 30.3% fromSeptember (5,518). October’s salesactivity shows a market revitalisedby easing COVID-19 restrictions,the spring lift and growingconfidence in vendors and buyersto make decisions about theirhousing.

For New Zealand, excludingAuckland, the number of propertiessold in October 2021 decreased22.5% year-on-year to 4,614(October 2020: 5,951). Again, salesincreased month-on-month by11.7% (September 2021: 4,129).

In Auckland, the number ofproperties sold in Octoberdecreased by 20.3% year-on-year(October 2020: 3,234, October2021: 2,576). The increasemonth-on-month shows themarket’s resilience, with 85.5%more properties sold in October

than in September 2021 (1,389).Despite prolonged restrictions, theAuckland market seems to havefound its rhythm again. The abilityto conduct business remotely andeased restrictions around viewingshave enabled real estate continuity,while a general FOMO (fear ofmissing out) stokes a market thatremains strong.

Tasman had its highest sales countsince November 2020, and Bay ofPlenty had its highest since March2021.

The regions with the greatestannual percentage decrease insales volumes were:

• West Coast: -55.2% (from 58 to26 – 32 fewer houses). The region’slowest sales count since April 2020and its lowest October month salescount in six years

• Northland: -40% (from 290 to 174– 116 fewer houses). The region’slowest October month sales countsince 2012

• Marlborough: -38.9% (from 108 to66 – 42 fewer houses).

Jen Baird, Chief Executive atREINZ, says: “October shows amarked increase in sales activity onSeptember and August, boostedby the usual spring uplift. Whileacross New Zealand, sales activitydecreased year-on-year by

21.7%, there was a 30.3% increasemonth-on-month. Auckland sawthe most significant uptick inmonth-on-month sales activity,with 85.5% more properties sold inOctober than in September 2021.Despite the restraints the market isoperating under, this is a strongerthan average October month. We’reseeing the continuation of what is afirm market, despite the pandemic.

“Lockdown restrictions are havinga reduced impact. Real estateprofessionals have the resourcesto conduct business remotely,and customers/clients have theconfidence to move forward tomake decisions. Steps by theGovernment — as advocated forby REINZ on behalf of members— to enable more private propertyviewings at Alert Level 3, forexample, have helped – especially

in areas longest affected bytighter lockdown. Less stringentrestrictions equate to more activity.

“Comparing listing and salesactivity over this lockdown to thecountry’s first one in 2020, showsa sharp difference. Namely, theimpact has not been so severe, andthe recovery has been quicker.

“October is the beneficiary ofincreased listings in the monthprior. It is expected that salesactivity across New Zealand willcontinue to rise in the comingmonths, as restrictions ease further,travel limitations lift and those whopreviously held back listing theirproperty do so. The demand iscertainly there,” Baird observes.

“Various levels of lockdown acrossNew Zealand have influencedactivity in the real estate market thismonth lending to mixed results. Weexpect to see a rise in activity asrestrictions ease further, especiallyin Auckland. Demand suppressionmeasures introduced this year,recent moves by the Reserve Bankto increase the OCR, and COVID-19restrictions to real estate activity arecreating headwinds for house pricesand we can see that the pace ofprice rises has slowed over recentmonths,” Baird concludes.

STEADY INCREASE IN MEDIAN PRICES ACROSS NEW ZEALAND

Median prices for residentialproperty across New Zealand

$725,000 in October 2020. Ten outof 16 regions reached median pricerecords, and one had an equal pricerecord — the most since March2021. The number of price recordsis above average for an Octobermonth, reflecting a firm marketreinforced by continued demand.

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increased by 23.4% to $895,000in October 2021 compared to