FEATURES • HOUSING COMMENTARY
Record prices continue Record low listings this summer is translating into record sale prices and there’s no sign of it abating, writes Daniel Smith.
T
he new year brought with it the end-of-year data for 2020, and what a picture it paints. Record lows, record highs, and the continuation of a post-Covid housing boom that seems to show no sign of abating. But while there’s a general consensus that 2021 will continue to see strong growth, for property investors, lack of stock, the changed regulatory environment, and restrictions on lending may act as handbrakes. Summer is traditionally a great time for the market, but as the tide of housing stock ebbed over Christmas and early January, many were left waiting for it to come back in. Data revealed stock at record lows and prices rising dramatically, with records broken up and down the country. There is much interest in the year ahead and it’s a fascinating time to be in the property game.
Prices soaring As the total pool of properties available for sale in New Zealand fell to record lows over summer, the upward pressure on house prices continued. The country is seeing a new record median house price for the fourth month in a row according to the latest data from the Real Estate Institute of New Zealand (REINZ). The median house prices nationwide increased by 19.3% from $628,000 in December 2019 to a new record of $749,000 in December 2020. It’s not just a case of Auckland pushing the numbers up; median prices (excluding Auckland) increased by 17.8%, from $535,000 in December 2019 to $630,000 in December 2020. Bindi Norwell, Chief Executive at REINZ says: “For the fourth month in a row, 016
TMM 01 • 2021
BY DANIEL SMITH New Zealand has seen house prices reach a new record – a continuation of the pattern we’ve seen in the housing market for the last few months – highlighting how strong the residential housing market is in all parts of the country.” Data from Realestate.co.nz shows that the regions have dramatically caught up with the month-on-month price increases we have seen occurring in the main centres. The largest price increase during 2020 was in Gisborne, where average asking prices were up 21.8% on 2019 to $526,948. This was followed by Wairarapa and Manawatu/ Whanganui, both up 16.8% to $591,600 and $494,468 respectively. Southland prices increased 14.4% to $406,872 and Otago was up 13.7% to $526,609. Nick Goodall from CoreLogic says the data shows investors should not expect a slowing down in prices any time soon. “Without any major policy change regarding property in the works, the longterm affordability of the property market is reliant on significantly increasing supply, which is a slow-moving factor. So, for now, all indications are that the fervent growth in property values will continue throughout the summer at least.”
to 8,935) – the highest number of properties ever sold in this month. Vanessa Taylor, spokesperson for Realestate.co.nz says, “Properties in New Zealand, on average, cost $75,056 more in 2020 than they did in 2019. Coupled with the record demand, this tells us that people didn’t shy away from buying and selling last year.” But despite demand for property, decreasing stocks put the pressure on sales numbers. Nationally, 109,128 properties were listed for sale in 2020 – a 2.6% decrease on the 112,007 properties that hit the market in 2019. Marlborough property seekers were most squeezed for choice last year, with 16.2% fewer homes coming on to the market in the region compared to 2019. In Northland, new listings were down 15.9% on 2019 and in Nelson and Bays they dropped 14.0%.
Crunching the data
Taylor says, “What we’ve seen quite clearly throughout 2020 is demand for property outweighing supply, which could have contributed to price increases.” Only Auckland bucked the trend, with a 10.5% increase in listings in 2020. “In Auckland we’ve started to see a change,” says Taylor, “the large number
With low sales stock across the country, buyers have had to move fast. That speed is reflected in sales numbers that have broken monthly records (yet again). The number of residential properties sold in December 2020 across the country increased by 36.6% from December 2019 (from 6,543
‘For the fourth month in a row, New Zealand has seen house prices reach a new record’ _ Bindi Norwell
