Number of million dollar plus properties sold in 2020 reaches new record levels

The number of properties sold around the country for one million dollars, or more, during 2020 increased by 68.0% when compared to 2019. In 2020, 18,181 million-dollar-plus properties sold (up from 10,819 in 2019), surpassing the 2016 record (11,619 million-dollar-plus properties sold) by an additional 6,562 properties, according to the Real Estate Institute of New Zealand’s (REINZ) Million Dollar Price Report.

Looking at New Zealand excluding Auckland, the number of million-dollar-plus properties sold increased significantly by 61.5% in 2020 with 5,056 properties sold in this bracket (up from 3,131 in 2019 – an additional 1,925 properties) – a record level of sales in the million-dollar-plus bracket in a calendar year.

In Auckland, the number of million-dollarplus properties sold during 2020 increased remarkably by 70.7% when compared to the previous year, with 13,125 milliondollar-plus properties sold (up from 7,688 in 2019) marking the highest number of million-dollar-plus properties sold in Auckland since records began, and the first time Auckland has seen more than 10,000 properties sold in this bracket.

Bindi Norwell, Chief Executive at REINZ says: “When COVID-19 first hit New Zealand’s shores in Q1 2020, no one would have predicted that the year would become a record breaker for property prices and would conclude with a 68.0% uplift in the number of million-dollar-plus properties sold.

“Additionally, the 2016 record was exceeded by more than 6,000 sales and this was the third consecutive year that New Zealand has seen a year-on-year increase in milliondollar-plus properties sold.

“The regions have seen a similar pattern, with a 61.5% increase in million-dollar-plus property sales. This is a result of demand continuing to exceed supply in many parts of the country and shows the effect that the shortage of housing stock is having on house prices,” continues Norwell.

“There has been a significant increase in the number of properties sold at the top end of the market, with a 112.7% increase in $3 million-plus property sales nationally and a 71.9% increase in $3 million-plus property sales outside of Auckland,” Norwell says.

“While the property market may have taken a slight pause in the first half of 2020 due to COVID related restrictions, the second half of the year showed signs of renewed confidence with more than two-thirds of those million-dollar-plus sales occurring in the second six months of 2020,” says Norwell.

Regional breakdown

The region with the biggest percentage increase in number of properties sold for one million dollars or more was Southland, with a 166.7% increase from 2019 (8

properties up from 3 – an additional 5 properties). However, these numbers do appear more inflated, due to the small sample sizes.

15 out of 16 regions saw year-on-year increases in the number of properties sold for $1 million or more in 2020 – with all 15 reaching new record highs. The West Coast was the only exception, with no milliondollar-plus sales recorded.

Regions with the strongest percentage increases in the number of million-dollarplus sales year-on-year, in addition to Southland, were:

• Manawatu/Wanganui: +130.4% (from 23 to 53 properties – an additional 30 properties) • Marlborough: +117.7% (from 17 to 37 properties – an additional 20 properties) • Tasman: +102.4% (from 42 to 85 properties – an additional 43 properties) • Gisborne: +100.0% (from 13 to 26 properties – an additional 13 properties).

When looking at the number of properties sold for $3 million or more in 2020, Hawke’s Bay saw the largest percentage increase, growing from 1 property in 2019 to 3 properties in 2020 (a 200.0% increase yearon-year).

Regions with the strongest increase in $3 million-plus sales year-on-year, in addition to Hawke’s Bay were:

• Auckland: +120.7% (from 323 to 713 properties – an additional 390 properties)

• Northland: +100.0% (from 2 to 4 properties – an additional 2 properties)

• Bay of Plenty: +81.8% (from 11 to 20 properties – an additional 9 properties)

• Wellington: +66.7% (from 9 to 15 properties – an additional 6 properties)

• Waikato: +66.7% (from 9 to 15 properties – an additional 6 properties).

In addition to these regions, Nelson and Marlborough saw their first properties sold for $3 million-plus during 2020, with 2 and 1 properties sold respectively. Nationally, the number of $3 million plus properties sold in 2020 increased 112.7% year-on-year (from 387 to 823 properties – 436 more properties). There was also a 108.7% increase year-on-year in $5 millionplus properties sold nationally in 2020 (from 69 to 144 properties – 75 more properties). “There are a number of factors behind the rise in the number of million-dollar plus properties sold including demand continuing to outweigh supply, record low interest rates, increased regional investment, increased consumer confidence levels, a fear of missing out, a strong agricultural sector, the removal of LVRs in early 2020 and the perceived need to rush before they are reinstated. Additionally, we’ve seen an increase in first home buyers in the market who tend to be purchasing at the lower to mid-end of the market, which in turn, lifts the overall market up.

“It will be interesting to see what happens in the first half of 2021 and whether more stock will come to the market, or if investor buying will slow with the reintroduction of LVRs. The Government and the industry need to work together to ensure that the ongoing unaffordability of housing in New Zealand can be meaningfully addressed,” concludes Norwell.