FEATURES • HOUSING COMMENTARY
Defying predictions Covid-19 be damned: the housing market is proving remarkably resilient in the face of the pandemic and no-one is expecting that to change anytime soon, discovers Miriam Bell. BY MIRIAM BELL
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ack when Covid-19 first broke out in New Zealand and the country went into lockdown, economic fears were high and many thought a housing market crash was likely. Commentators predicted significant price declines and, during the first lockdown, activity stalled. Yet – fast forward a few months – and the market reality has turned out to be somewhat different. Not only did the market bounce back strongly following the first lockdown in March-April, but it now seems that lockdown 2.0 has not dented its resurgence. The most recent round of housing market data marked the fourth consecutive month to turn in booming prices and sales. And that’s left economists revising their forecasts.
Prices firmly ascendant To start with, price decline forecasts be damned. Values have largely held firm around most of the country in the face of the Covid-19 storm and, right now, prices are even booming in some markets. The CoreLogic House Price Index* shows that while values nationwide have 014
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fluctuated slightly in recent months, they were up by 0.8% in the three months to September. This left the average national value at $743,678 in September. Of the main urban centres, Tauranga (up 0.1% to $795,182) and Dunedin (flat on $547,429) saw the least value growth. However, Tauranga’s market has been flat for a while, while in Dunedin’s case it follows exceptionally strong value growth over the last year. Values in the other four main centres (Auckland, Hamilton, Wellington and Christchurch) all increased over the quarter. While Queenstown values are down by 4.2% year-on-year (to an average value of $1,141,643), overall, value growth was the order of the month for provinces. However, the September price data from REINZ presented an even healthier picture. In fact, REINZ chief executive Bindi Norwell described the market’s recovery as “astonishing”, saying it has “certainly surpassed many predictions”. Not only did the data show the national median house price up by 14.7% yearon-year, and by 1.5% on August, to $685,000 in September, but every region saw an annual increase in median prices.
‘We expected to see a 7% [house price] decline but the collective predictions of house price decline have been proven wrong.’ _ Dominick Stephens
Further, nine regions and 19 districts/ cities turned in record median prices. The regions that hit record medians, on the back of double-digit year-onyear increases, were Gisborne, Taranaki, Otago, Bay of Plenty, Manawatu/ Whanganui, Wellington, Waikato, Canterbury and Auckland. Auckland’s median price increased by 12.6% to $955,000 from $848,000 in September 2019. It was also up by 0.6% from $949,500 in August. Both Realestate.co.nz and Barfoot & Thompson’s September data provided
