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REINZ Monthly Report January 2020

By Julie Halligan

New Zealand rounded off the decade with the highest number of residential properties sold for the month of December in three years and price rises in 15 of 16 regions, according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand.

The number of residential properties sold across New Zealand in December 2019 increased by 12.3% from the same time last year to 6,285 up from 5,596 (689 more properties).

For New Zealand excluding Auckland, the number of properties sold increased by 5.8% when compared to the same time last year (to 4,425 up from 4,184) – the highest for the month of December in 3 years.

In Auckland, the number of properties sold in December increased by 31.7% year-on-year (to 1,860 up from 1,412) – the highest number of residential properties sold in the month of December since December 2015.

Regions outside Auckland with the highest percentage increase in annual sales volumes during December were:

  • Bay of Plenty: +21.5% (from 414 to 503 – 89 more houses) – the highest for the month of December in 4 years • Southland: +18.3% (from 126 to 149 – 23 more houses) – the highest for the month of December in 3 years • Northland: +17.3% (from 173 to 203 – 30 more houses) – the highest for the month of December in 3 years • Canterbury: +16.1% (from 776 to 901 – 125 more houses) – the highest for the month of December in 3 years.

Four regions saw decreases in annual sales volumes during December:

  • West Coast: -43.5% (from 46 to 26 – 20 fewer houses) – the lowest since April 2017 • Gisborne: -18.5% (from 54 to 44 – 10 fewer houses) – the lowest for the month of December in 5 years • Manawatu/Wanganui: -14.2% (from 351 to 301 – 50 fewer houses) – the lowest for the month of December in 5 years • Hawke’s Bay: -1.4% (from 213 to 210 – 3 fewer houses)

Bindi Norwell, Chief Executive at REINZ says: “The property market had a solid end to the decade with a 12.3% increase in the number of properties sold in December 2019 when compared to December 2018. That’s an additional 22 houses sold each day around the country in December, which is not an insignificant number. With insufficient properties on the market to satisfy buyer demand, it suggests that buyers are being more definitive when it comes to purchasing as they are aware of the need to move quickly on properties and areas with high demand. This is backed up by the decrease in the median number of days to sell which is at its lowest point for 3 years.

“Looking around the country, 12 out of 16 regions saw annual increases in the number of properties sold – the highest number of annual increases in 3 months – with particularly strong increases in Auckland, the Bay of Plenty, Southland, Northland and Canterbury,” continues Norwell.

“Sales in Auckland were the highest for the month of December in four years, with particularly strong uplifts in sales volumes in Papakura District (+65.0%), North Shore City (+63.6%) and Waitakere City (+58.3%),” points out Norwell.

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REINZ House Price Index (HPI) reaches new record high for NZ and 10 regions;

The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 6.6% year-on-year to 2,915 – a new record high.

The HPI for New Zealand excluding Auckland increased 8.9% from December 2018 to 2,902 another new record high.

The Auckland HPI increased by a solid 4.0% year-on-year to 2,931 a new record high and the second consecutive positive annual increase in 15 months.

In November, Southland again had the highest annual growth rate with a 20.6% increase to 3,292 a new record high. In second place was Manawatu/Wanganui with an annual growth of 19.2% to a new record high of 3,408 and again in third place was Gisborne/Hawke’s Bay with a 13.8% annual increase to a new record high of 3,022 – only the second time Gisborne/Hawke’s Bay has gone over the 3,000 mark.

In December, 10 out of 12 regions reached record high HPI levels; the only exceptions were Taranaki (+10.4%) and Canterbury (+2.9%) showing the overall strength of the property market.

Days to Sell decreases both YOY and MOM

In December the median number of days to sell a property nationally decreased by 4 days from 35 to 31 when compared to December 2018 – the lowest days to sell in 3 years. This figure was 2 days fewer than November 2019’s figure of 33 days.

For New Zealand excluding Auckland, the median days to sell decreased by 4 days from 34 to 30 – the lowest days to sell in 3 years. Auckland saw the median number of days to sell a property fall from 39 to 34 year-on-year – the lowest days to sell in 2 years.

Southland again had the lowest days to sell of all the regions at 21 days, down 2 days from the same time last year, but 3 days higher than November 2019’s figure which was the lowest median days to sell since August 2007.

December saw 6 regions with the median number of days to sell below the 28 mark, the highest number of regions with property selling that quickly since April 2017.

Northland had the highest days to sell at 45 days, down 3 days on December 2018, and down 2 days on November 2019’s figure of 47. The West Coast had the second highest median days to sell across the country at 41 days – down 35 days on the same time last year, and down 31 days on November 2019’s figure of 72.

Inventory

The total number of properties available for sale nationally decreased by -24.5% in December to 18,230 down from 24,158 in December 2018 – a decrease of 5,928 properties compared to 12 months ago and the lowest level of inventory since records began.

Again, all regions across the country saw an annual decrease in total inventory levels, with the largest percentage decreases in:

  • Taranaki: -47.3% from 649 to 342 – 307 fewer properties and the lowest level of inventory since records began • Southland: -40.6% from 529 to 314 – 215 fewer properties • Marlborough: -33.1% from 366 to 245 – 121 fewer properties • West Coast: -29.7% from 461 to 324 – 137 fewer properties.

Gisborne has the lowest number of weeks’ inventory with 5 weeks inventory available to prospective purchasers – the equal lowest inventory since records began.

This was followed closely by Wellington with 6 weeks’ inventory and Hawke’s Bay with 7 weeks’ inventory available to prospective purchasers.

The West Coast had the highest number of week’s inventory with 59 weeks’ inventory available to prospective purchasers – the highest in 14 months.

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AUCKLAND REINZ REGIONAL COMMENTARY

“December saw the Auckland market finish 2019 with a median price of $890,000, just $10,000 off the record achieved in March 2017. Manukau City saw a record median price of $900,000, 33 months since its prior record back in March 2017. The REINZ House Price Index for Auckland also reached 2,931, up 4.0% year-on-year.

There was increased sales activity at the end of the year with a significant 31.7% increase in properties sold year-on-year, recording the most December sales since 2015. Properties which had previously been on the market for a while were sold, which is a positive indication for what the start of 2020 might bring. First home buyers continue to be interested in the Franklin and South Auckland areas, which features some of the most affordable properties in Auckland.

First home buyers remain active in auction rooms where there have been strong clearance rates. Low interest rates continue to create more activity in the market. However, banks are still being tough with lending and have high demands for proof of repayments.

We are starting to see a shift in “Baby Boomers” who are looking to downsize or even enter retirement accommodation. Investors have largely left the market in Rodney, which has likely caused a shortage in rental housing. Although, there are still a few investors looking around for investments in popular holiday hotspots. In other parts of the region, we have started to see some investors returning to the market as they perceive house prices will continue to increase in 2020.

As we enter the New Year, we expect to see more competition at auctions and hopefully more listings coming onto the market with vendors looking to take advantage of their capital gains.” Bindi Norwell REINZ CEO

Compared to December 2018

  • Median Price up 3.5%
  • Sales Count up 31.7%
  • Days to Sell decreased 5 days. Compared to November 2019
  • Median Price up 0.6% • Seasonally adjusted median price up 2.2%
  • Sales Count down 22.4%
  • Seasonally adjusted sales count down 2.1%
  • Days to Sell decreased 1 day.

The current Days to Sell of 34 days is above the 10-year average for December which is 33 days. The level of inventory available for sale currently sits at 17 weeks, five weeks less than in December 2018.

SOURCE;REINZ Monthly report January 2020

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