Post COVID-19 property market remains buoyant


The global economic outlook may still be gloomy, but that doesn't seem to have dampened the NZ property market.

According to REINZ, house prices across the country increased by 9.2% compared to June 2019. New property listings also increased nationwide, up by 19.7% on the same time last year says realestate.co.nz and REINZ reports the number of properties sold nationally increased by 7.1% – the best result for a June month in over four years.

These results have surpassed the expectations of even the most optimistic of commentators during the lockdown.

No doubt falling interest rates, the removal of loan-to-value ratios, increased investor activity and demand from the large number of Kiwis returning home have had an impact. So too has the government’s fiscal policies. Certainly, the wage subsidy and mortgage holiday schemes have had a cushioning effect. 

However, the global economic outlook is getting gloomier by the day. The resurgence of Covid-19 cases in Australia and parts of Europe, together with alarmingly high numbers continuing in the US mean the future is far from certain.

NZ may have escaped relatively unscathed so far; however, it seems unlikely we will have immunity from the worldwide economic fallout for much longer.

The upcoming NZ election also needs to be thrown into the mix. The campaign season traditionally has a dampening effect on the property market as homeowners adopt a wait-and-see approach. It remains to be seen whether it has a similar impact as we head towards September’s election.

Here’s an in-depth look at the latest on NZ property market data.

  • New property listings
    Data from realestate.co.nz shows that new property listings have bounced back since the lockdown. Nationwide they are up 19.7% on this time last year.

    High-performing regions include the following:
    • Southland up 59%
    • Auckland up 38.9%
    • West Coast up 32.4%

Only four regions – Gisborne, Wairarapa, Marlborough and Canterbury – saw modest decreases in new listings.


  • Inventory
    REINZ statistics show a decrease in the total number of properties for sale. This trend has continued for 12 months. The return for June is down 11.7% on June 2019’s total.
    The regions with the highest percentage decrease in inventory levels include Taranaki (down 41.8%), Marlborough (down 37.3%) and Northland (down 24.5%).
  • Volumes
    Nationwide, June 2020 saw the highest number of properties sold in that month for four years. REINZ reports that 6,625 properties were sold across the country, which is an increase of 7.1% in 2019.

    In Auckland, volumes were even higher, with a 9.4% increase on sales year on year. Other standout regions included the West Coast (up 43.2%), Southland (up 27.7%) and Taranaki (up 19.7%).

    According to the latest Reserve Bank data, first home buyers accounted for more than 20% of new mortgages in June. And investors made up 19%. Perhaps it’s returning Kiwis that are driving the demand, while low-interest rates could be behind the increase in investor activity. At the moment, property may well offer a better return than putting money in the bank.
  • Values
    REINZ reports a 9.2% increase in median house prices across NZ since June 2019. The median house price now sits at $639,000, which is up by 3.1% on May's median of $620,000.

    Top-performing areas include Waikato with a 17.1% year-on-year uplift and Auckland's median house price increased by 9.2% to $928,000. The REINZ HPI measures the changing value of property and reveals a similarly upbeat picture with an 8.6% increase year on year. Take out the Auckland factor and the HPI for the country increased by 9.5% from June 2020. Auckland’s HPI increased by 7.7%.

    Out in the regions Manawatu/Wanganui had the biggest change with a 19.4% increase on this time last year to a record level of 3,683. Gisborne/Hawke's Bay came in second with 17.8%, and Southland was third with a 12.2% annual increase. However, three out of the 12 regions experienced a decrease: Northland (down 0.7%), Bay of Plenty (down 0.7%) and Otago (down 1.0%).

    The June 2020 QV House Price Index (HPI) has, however, recorded a 0.2% decrease in nationwide property values.

    Some of the provincial centres have fared better than others. Queenstown, with its reliance on the tourist industry, saw a 2.1% decrease in average dwelling value in June. On the other hand, Invercargill saw a 1.7% increase. Its broad-based economy may have provided some protection compared to tourist-dependent neighbouring Queenstown.

    The data from realestate.co.nz suggests that property prices remain stable with the national average asking price at $727,749. Three areas recorded all-time asking price highs. In the Coromandel, the average asking price rose above $800,000 for the first time, while in Southland, the average asking price increased by 18.4%. Hawke’s Bay is the other top-performer with the average asking price now $609,243.

    In fact, realestate.co.nz reports price highs and year-on-year increases in 17 out of 19 regions.


  • Days to sell
    REINZ is reporting a return to a standard median number of days to sell. Nationally, the figure increased from 45 in June compared to 41 at the same time in 2019. However, this was down from 58 days experienced in May.

    The Tasman region with 28 days to sell recorded the lowest result nationwide. In comparison, the West Coast, with 96 days, was the country's highest result. Across the regions as a whole; however, the majority have reported a month-on-month decrease in median days to sell.

    Auction rooms look as though they are also returning to pre-Covid levels. Nationally, 11.1% of sales went under the hammer in June, which is up from 10% last year. Auctions were particularly popular in Gisborne (46.3% of sales) and Auckland (21.5%).
  • Rentals
    The latest data from Trade Me Rental Price Index suggests the rental market is also bouncing back following the lockdown.

    However, the situation varies widely across the regions, especially in tourist-dependent areas. In Queenstown-Lakes district for example, supply is up 90% on the same time last year. And in Rotorua, it's up 39%.

    This may well be down to short-term holiday accommodation coming on to the market as visitor numbers dry up in these tourist hotspots. Similarly, people who usually work in tourism may be moving on to other parts of the country in search of work.

    When it comes to rent increases, according to Trade Me, the government's six-month freeze on rent increases has not stopped rents from going up. The rent freeze does not apply to new tenancies which is why the year-on-year rise in May was 2%.

    If the large number of Kiwis returning to the country continues, then we may see some changes in rental vacancy rates which have increased since lockdown.
  • Where to next?

    We may still be seeing the effects of a post-lockdown sugar rush in the property market.  As the global economy worsens and the local impact of the pandemic becomes clearer, things may well change.

    The next set of National Accounts, due to be released on September 17th, will show the true extent of the country’s recession.

    Commentators are still predicting more job losses as government wage subsidies come to an end. And if unemployment rises, then banks are likely to tighten their lending criteria even further.

    Finance Minister Grant Robertson has, however, hinted that the government might be willing to extend the wage subsidy and mortgage holiday schemes.

    One thing for sure is that with the September election drawing closer, it’s likely to be a bumpy and uncertain ride over the next few weeks.

    I’ll continue to keep you updated on all the twists and turns in my monthly analysis. In the meantime, if you have any queries, then please get in touch.