Record median house prices for half of NZ according to REINZ August data
Median house prices across New Zealand increased by 16.4% in August to $675,000, up from $580,000 in August 2019 and up from $659,000 in July (a 2.4% lift) and every region in the country saw an annual increase in median house prices, 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.
Median house prices for New Zealand excluding Auckland increased by 14.2% to a new record median price of $570,000, up from $499,000 in August last year and up from $557,500 in July this year.
Additionally, Auckland’s median house price increased by 16.0% to $950,000 a new record high up from $819,000 at the same time last year, and up from $918,097 in July this year (a 3.5% increase).
Over and above Auckland, 7 regions saw record median prices during August:
Bindi Norwell, Chief Executive at REINZ says: “For the last few weeks we’ve been hearing reports from around the country of vendors achieving good prices for the sale of their homes; but we would never have guessed that 8 regions and 17 Districts/Cities across the country would see record median prices just 4 months after the entire country was in lockdown. The housing market’s recovery post-lockdown over the last few months has been astonishing and has certainly surpassed many predictions.
“August saw record median prices in Rotorua District ($510,000), Tauranga City ($745,000), Lower Hutt City ($670,000), Upper Hutt City ($663,200), Papakura District ($775,000), Rodney District ($961,000) and Waitakere City ($890,000),” continues Norwell. “At this point last year, the Hawke’s Bay region had not had a median price over the $500,000 mark and now the region is extremely close to exceeding the $600,000 median mark. It’s a similar picture in Otago, where the region had only seen one month with a median price over the $500,000 mark and now, it’s closer to the $600,000 mark than the $500,000 mark,” she continues. “The combination of low interest rates, the removal of LVRs, the lack of listings, people’s aspiration to have more space/a bigger backyard, catch up post lockdown and first time buyers’ desire to get onto the market have all contributed to the uplift in prices we’ve seen over the last few months. Unless we see more listings come to the market before Christmas, we may start to see additional pressure on house prices and affordability,” points out Norwell.
Most properties sold in the month of August for 5 years
The number of residential properties sold in August across New Zealand increased by 24.8% from the same time last year (from 6,132 to 7,652) – the highest number of properties sold in an August month for 5 years.
For New Zealand excluding Auckland, the number of properties sold increased by 16.7% when compared to the same time last year (from 4,320 to 5,040) – the highest for the month of August in 4 years.
In Auckland, the number of properties sold in August increased by 44.2% year-on-year (from 1,812 to 2,612) – the highest for the month of August in 5 years.
Regions outside Auckland with the largest increase in annual sales volumes during August were:
There were also four regions that saw an annual decrease in sales volumes:
“For many parts of the country, August was an extremely busy month sales volume wise, with the highest number of properties sold for the month of August in five years bolstered by an uplift in sales volumes in Auckland, Nelson, Southland and Hawke’s Bay. Overall, there were 1,520 more residential properties sold this August than last August which equates to an additional 49 properties sold a day which is pretty incredible,” says Norwell. “The Level 3 ‘lockdown’ imposed on Auckland from 12-30 August had little impact on sales volumes, with last month seeing the highest number of properties sold in an August month for 5 years showing how the adoption of digital tools has been a key factor in keeping the property market moving as we moved back up the Alert Level system,” she continues. “Unlike median prices where every region saw an uplift, there were a few regions that saw annual decreases in sales volumes. Of note, is the Gisborne region which has seen annual falls in sales volumes for the last couple of months now, showing how the listing shortage is really starting to be felt in the region,” continues Norwell. “It will be interesting to see what happens now that we’re heading into spring, as traditionally sales volumes start to lift as the weather warms up. As we’ve already seen, 2020 seems to be defying all predictions and going against all norms at this point in time. However, the full impact of COVID-19 may not have been realised yet, particularly in relation to unemployment and the economy,” she continues.
REINZ House Price Index (HPI) reaches new high
The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 10.0% year-on-year to 3,072 a new high.
The HPI for New Zealand excluding Auckland increased 9.5% from August 2019 to 3,033 a new high.
Auckland’s HPI increased 10.7% year-on-year to 3,121 also a new high on the index.
In August, Gisborne/Hawke’s Bay again had the highest annual growth rate with a 14.7% increase to a new record index level of 3,331. In second place was Taranaki with an annual growth rate of 14.3% to an index level of 3,358 and in third place was Wellington with an 11.6% annual increase to a new record index level of 3,065 – the first time the Wellington region has been in the top 3 for 25 months.
The 3 month data for New Zealand showed an uplift of 4.6% the highest percentage increase in 49 months despite the impact of COVID-19.
Days to sell lowest for an August month in 4 years
In August, the median number of days to sell a property nationally decreased 5 days from 39 to 34 when compared to August 2019, the lowest for the month of August in 4 years, and the same figure as July this year.
For New Zealand excluding Auckland, the median days to sell decreased by 4 days from 37 to 33, the lowest for the month of August in 4 years, and the same figure as July this year.
Auckland saw the median number of days to sell a property decrease by 9 days from 44 to 35 year-on-year, the lowest for the month of August in 4 years.
Taranaki again had the lowest days to sell of all regions at 24 days – down 11 days from the same time last year and down 1 day from July. This was the lowest days to sell for Taranaki in an August month since records began.
Manawatu/Wanganui again had the second lowest median days to sell in August at 27 days, the same as August last year and 1 day less that July this year. This was the lowest median days to sell in an August month since August 2005 and is the second lowest in an August month since records began.
The West Coast again had the highest days to sell for the country at 78 days, down 16 days on last year’s figure.
Looking at the regions as a whole, 12 out of 16 regions decreased year-on-year when it came to days to sell, with the only exceptions being Gisborne (up 2 days to 32), Manawatu/Wanganui (which was flat on 27 days), Otago (up 2 days to 32) and Southland (up 2 days to 33).
“To have all but two regions with a median number of days to sell below the 40 mark in an August month is not something we would expect to see at this time of year, however, the insatiable appetite for property is driving this. We just hope that people are taking their time to undertake the appropriate due diligence before purchasing a property,” continues Norwell.
Auctions continue to prove a popular selling method in many parts of the country
Auctions were used in 16.1% of all sales across the country in August, with 1,232 properties selling under the hammer – up from 10.6% at the same time last year, when 650 properties were sold via auction. This was the highest percentage of auctions for the month of August in 4 years.
Gisborne had the highest percentage of auctions across the country with 51.4% (19 properties) sold under the hammer, up from 31.5% (17 properties) in August 2019.
Auckland had the second highest percentage of auctions in New Zealand with 31.0% of properties (811 properties) sold under the hammer up from 18.3% at the same time last year (332 properties). This was the highest percentage of auctions Auckland has seen for 5 months.
In third place was Bay of Plenty with 17.5% (90 properties) sold under the hammer up from 13.2% in August 2019 (63 properties). This was the highest percentage of auctions for the month of August in 3 years.
Inventory falls for 14 months in a row – lowest level of inventory on record
The total number of properties available for sale nationally decreased by -13.2% in August to 17,974 down from 20,712 in August 2019 – a decrease of 2,738 properties compared to 12 months ago and the lowest level of total inventory since records began.
Only 2 regions saw an annual increase in inventory level during August – Hawke’s Bay (+3.0%) from 396 properties to 408, an additional 12 properties and Southland (+3.4%) from 324 to 335, an additional 11 properties.
Regions with the largest percentage decrease in total inventory levels were:
Wellington had the lowest number of weeks’ inventory with 6 weeks inventory available to prospective purchasers, 1 week less than last year’s figure. This was followed by Hawke’s Bay and Manawatu/Wanganui both with 8 weeks’ inventory.
Northland again had the highest number of week’s inventory with 39 weeks’ inventory available to prospective purchasers up from 35 weeks at the same time last year. West Coast was the next highest with 34 weeks’ inventory available, down from 36 weeks last year.
“It’s surprising that total inventory is at its lowest position since records began, given some of the record prices being achieved around the country. Hopefully, we’ll see a little more momentum as we head towards summer and that purchasers will have more properties to choose from,” concludes Norwell.
The number of homes sold for less than $500,000 across New Zealand fell from 37.7% of the market (2,314 properties) in August 2019 to 26.0% of the market (1,986 properties) in August 2020.
The number of properties sold in the $500,000 to $750,000 bracket increased from 32.2% in August 2019 (1,974 properties) to 32.3% in August 2020 (2,475 properties).
At the top end of the market, the percentage of properties sold for $1 million or more increased from 13.4% (820 properties) in August 2019 to 20.7% (1,586 properties) in August 2020 the highest percentage for an August month since records began.