The Pulse Property Market Update
Election campaign fails to dampen property market
The run-up to an election often sees the property market slow down. Political uncertainty means people delay buying or selling in a wait-and-see approach. But not this time.
The latest data suggests the New Zealand property market remains on an upwards trajectory. Returns for September show increased sales and house prices nationwide. However, demand is still outstripping supply, and some regions have seen record total stock lows.
Here’s an overview of the key trends from September’s data.
The Real Estate Institute of New Zealand (REINZ) reported the number of properties available for sale nationwide was down 17% year-on-year.
And realestate.co.nz reported that 10 of the 19 regions hit record stock lows. The worst-affected areas were as follows:
- Taranaki: -50.7% (the lowest level since records began in 2007)
- Marlborough: -37.5%
- Wairarapa: -33.0%
Only Central Otago/Lakes baulked the nationwide trend with a 9.1% increase in housing stock. This result indicates demand isn’t quite as high as elsewhere in the country.
September saw the highest number of properties sold in a September month for 14 years, according to REINZ. Nationwide sales increased by 37.1% year-on-year. And all regions experienced increased sales volumes.
Regionally, the top performers included the following:
- Nelson: + 66.2%
- Auckland: +53.2%
- West Coast: +57.9%
Across the country, REINZ reported a 14.7% increase in median house prices. The median price in September 2019 was $596,956, compared to a new record high of $685,000 for September 2020.
It’s a similar story in the regions with all areas seeing an increase. Furthermore, nine areas experienced record high medians. Standout performers include the following regions:
- Gisborne: +45.8%
- Taranaki: +21.3%
- Otago: +20.7%
However, according to realestate.co.nz, average asking prices have dropped. Across the country, the average in September was $764,864, a drop of 7.3% since August.
While nationwide the average was down, some regions saw an increase in average asking prices. In Auckland, the average asking price is now over $1 million.
Other notable regions include the Central North Island up 5.6% year-on-year, and Marlborough which was down 6.4%.
In terms of buyers, CoreLogic’s Buyer Classification series for quarter three showed that investors and first-home buyers accounted for more than one-third of purchases. And the share for first-home buyers at 25% is the highest on record.
Days to sell
REINZ reported that the median number of days to sell continues to fall nationwide. The average for September was 32 compared to 36 in September 2019.
In the regions, the best performer was Manawatu/Whanganui at 23 days, down two days year-on-year. The West Coast had the highest number of days to sell at 49 days. However, this was down from 66 days in September 2019.
Auctions accounted for 16.5% of sales nationwide according to REINZ, up from 13.1% at the same time last year. Auctions were especially popular in Gisborne with a record 74.4% going under the hammer.
Where to next?
As we head towards the peak seasons of spring and summer, the property market shows no signs of slowing down.
The clear majority achieved by the Labour government is likely to have a positive impact on business confidence and the financial markets. And the Reserve Bank’s policy could see mortgage rates fall even lower.
All the indicators suggest the property market will continue to deliver record-breaking results over the summer.
One thing for sure is I’ll keep you updated on all the latest data and trends.