The Pulse Market Update
The New Zealand property market continues to boom. The latest property market data shows steady increases in sales volumes and prices nationwide. And that’s despite the lockdown restrictions in Auckland and the rest of the country.
According to realestate.co.nz, nationally the average asking price increased by over 21% to $824,702. And the Real Estate Institute of New Zealand (REINZ) reported a record number of sales in August with a 24.8% increase year-on-year.
The performance of the New Zealand property market continues to exceed the expectations of even the most optimistic commentators. The combination of record-low interest rates plus the removal of LVR restrictions has given the market an unstoppable momentum that even lockdown restrictions can't dent.
CoreLogic’s latest Buyer Classification report shows that first homebuyers and investors remain very active in the market. However, the record low supply of listings means that many existing owner-occupiers are being forced to sit tight.
Here’s an overview of the latest data.
According to realestate.co.nz, the nationwide housing shortage shows no signs of easing. In August nine of the country’s 19 regions returned record stock lows. And nationwide, the total number of homes for sale decreased by 13.2% on the same time last year.
Taranaki saw the biggest stock decrease, down 47.9% year-on-year, followed by Marlborough (-36.3%) and Wairarapa (-32.3%).
The only regions to see increases in homes available for sale were Hawkes’s Bay (+3.1%), Central Otago/Lakes (+18%) and Southland (+3.2%).
Typically, the winter months see a slump in sales, but not this year. REINZ reported a record number of properties sold in August, up 24.8% from the same time last year.
Big movers across the regions include Nelson (+40%) and Southland (+38.6%). However, four areas saw a decrease in sales with Gisborne (-31.5%) a standout result.
According to REINZ, nationwide median house prices increased by 16.4% in August. Every region in the country saw an increase in median house prices with the South Island’s Otago (+17.2%) and Southland (+20.3%) topping the list.
Nationally, realestate.co.nz reported the average asking price in August was $824,702, up 9.1% on July’s result.
Days to sell
According to REINZ, the median number of days to sell a property decreased from 39 in August 2019 to 34 days this year. It’s a similar story across the regions with all but two reporting returns below the 40-day mark.
Auctions remain a popular selling method accounting for over 16% of sales across the country. REINZ reported that more than 50% of properties in Gisborne and 31% in Auckland went under the hammer in August.
Where to next?
There’s certainly plenty on the horizon for the property market.
In its latest monetary policy report, the Reserve Bank has kept the official cash rate at 0.25%. And it also indicated that the programme to lend directly to retail banks would be ready by the end of the year.
Designed to boost the economy, the Funding for Lending programme will make it cheaper for banks to borrow. This could well see further downward pressure on interest rates for retail borrowers.
In addition, the end of the wage subsidy will be a test of the demand within the property market. With the economy now officially in recession, unemployment is predicted to increase.
And, don’t forget the NZ election on 17 October.
Whatever the outcome, it’s bound to be a busy few months in the property market as we head into the peak seasons of spring and summer.
Get in touch for more information on any of the latest trends.