Auckland & NZ Hit Record Median Prices Before COVID-19 Hit, Says REINZ

Median house prices across New Zealand increased by 13.7% in March to a new record median price of $665,000, up from $585,000 in March 2019 and eight regions saw new record median 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 13.3% to a new record median price of $555,000, up from $490,000 in March last year.

In Auckland, median house prices increased by 11.1% to a new record median price of $950,000 – up from $855,000 at the same time last year, and a $65,000 uplift on February 2020.

In addition to Auckland, record median prices were recorded in:

• Northland with a 14.1% increase to $565,000 up from $495,000 at the same time last year
• Waikato with a 13.4% increase to $600,000 up from $529,000 at the same time last year
• Manawatu/Wanganui with a 28.7% increase to $431,250 up from $335,000 at the same time last year
• Taranaki with a 13.3% increase to $425,000 up from $375,000 at the same time last year
• Tasman with a 10.7% increase to $670,000 up from $605,000 at the same time last year
• Canterbury with a 6.8% increase to $490,000 up from $459,000 at the same time last year
• Southland with a 28.2% increase to $374,580 up from $292,105 at the same time last year.

Bindi Norwell, Chief Executive at REINZ says: “March was an extremely buoyant month for residential property across the country. March marked four months in a row where every region in the country saw an annual increase in median prices; it also marked a new record median price for the country at $665,000 and record median prices in 8 regions including Auckland and saw 12 out of 16 regions with double-digit annual median price increases.

“What we can say is that before COVID-19 hit New Zealand’s shores, the property market was in a strong period of growth which now includes the Auckland market, which had 5 consecutive months of year-on-year growth, following two years of stable prices,” she continues.

“How big the effects of COVID-19 are is up for debate, but the impact will depend on a huge number of factors including how long the country is in an Alert Level 4 lockdown for, the level of unemployment, consumer and business confidence levels, people’s ability to access finance (and finance their own mortgages) and how long the wider economy takes to recover. Property is a long-term investment and the market will recover; however, the question is, how long it takes to recover.

“The Auckland region eclipsed its previous record median price set back in March 2017 ($900,000) with a $65,000 uplift on February 2020 to hit the $950,000 mark, meaning that house prices rose $2,097 a day in March. Looking across the Auckland region, new record medians were set in Auckland City where prices increased by more than a quarter (26.3%) from the same time last year to $1,200,000, Manukau City (up 11.1% to $930,000) and Waitakere City (up 8.9% to $841,000),” continues Norwell.

Number of properties sold in March falls by 4.8%

The number of properties sold in March across New Zealand decreased by -4.8% from the same time last year – from 7,213 to 6,866 – 347 fewer properties and the lowest number of properties sold in the month of March in 9 years.

For New Zealand excluding Auckland, the number of properties sold decreased by -11.1% when compared to the same time last year (from 5,130 to 4,559) – 571 fewer properties.

In Auckland, the number of properties sold in March increased by 10.8% year-on-year (from 2,083 to 2,307) – the highest number of residential properties sold in 4 months.

In addition to Auckland, regions with percentage increases in annual sales volumes during March were:

• Northland: +4.8% (from 188 to 197 – 9 more houses)
• Marlborough: +9.6% (from 83 to 91 – 8 more houses).

Regions with the largest decrease in annual sales volumes during March were:

• West Coast: -48.1% (from 52 to 27 – 25 fewer houses) – the lowest number of properties sold for 35 months
• Southland: -24.8% (from 218 to 164 – 54 fewer houses) – the lowest for the month of March in 7 years
• Nelson: -21.1% (from 90 to 71 – 19 fewer houses) – the lowest for the month of March in 12 years
• Otago: -17.0% (from 424 to 352 – 72 fewer houses) – the lowest for the month of March in 9 years
• Manawatu/Wanganui: -14.1% (from 418 to 359 – 59 fewer houses)
• Wellington: -12.7% (from 858 to 749 – 109 fewer houses) – the lowest for the month of March in 9 years
• Gisborne: -12.0% (from 50 to 44 – 6 fewer houses).

“The first quarter of the year has seen 2,000 fewer new listings come to the market than the same time last year, so when you take that into account, plus the impact of 6 days of lockdown because of the impact of COVID-19 then it’s understandable why the number of properties sold in March has fallen nearly 5%. This is backed up by REINZ’s seasonally adjusted sales volumes figures, which show based on what happened in February we would have expected a much better result in March and this is likely the impact of the lockdown week on sales volumes,” says Norwell.

“Interestingly, Auckland bucked the trend, with the highest annual uplift in sales volumes of all regions with a 10.8% increase, thanks to big increases in the number of properties sold in North Shore City (+29.6%), Rodney District (+20.5%) and Papakura District (+18.4%),” she continues.

“Right now, in the Alert Level 4 lockdown period, people are still able to list their property for sale, but inspections can only be carried out online or via means such as virtual reality or ‘walk-through’ type tours. Going forward, we expect people will take a bit of a ‘wait and see’ approach when it comes to listing their property for sale. But for those who have decided after 4 weeks of being locked in their ‘bubble’ that they don’t like their house anymore, they will be desperate for the chance to move, so there may be some great opportunities for those wanting to buy and sell in the coming months,” continues Norwell.

REINZ House Price Index (HPI) reaches new record high in March

The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 9.3% year-on-year to 3,034 – a new record high.

The HPI for New Zealand excluding Auckland increased 10.3% from March 2019 to 3,010 another new record high.

The Auckland HPI increased by 8.2% year-on-year to 3,063 a new record high for the Auckland region.

In March, Manawatu/Wanganui had the highest annual growth rate with a 22.9% increase to 3,661 a new record high. In second place was Southland with an annual growth rate of 17.5% to 3,411 and again in third place was Gisborne/Hawke’s Bay with a 17.2% annual increase to a new record high of 3,195.

Highest number of regions with days to sell below 30 in 16 years

In March the median number of days to sell a property nationally decreased by 6 days from 36 to 30 when compared to March 2019 – the lowest days to sell for the month of March in 4 years.

For New Zealand excluding Auckland, the median days to sell decreased by 5 days from 34 to 29 – the lowest days to sell for the month of March in 4 years.

Auckland saw the median number of days to sell a property fall by 9 days from 42 to 33 year-on-year – the lowest days to sell for the month of March in 4 years and the lowest days to sell in 43 months.

Manawatu/Wanganui and Taranaki had the lowest days to sell of all regions at 23 days – down 3 and 5 days respectively from the same time last year. It was the lowest median number of days to sell for the month of March since records began for the Manawatu/Wanganui region and the lowest days to sell for Taranaki for 15 years.

The Taranaki region has now had a median number of days to sell of less than 30 days for 6 months in a row.

Northland again had the highest days to sell of any region at 52 days, up 5 days on March 2019, and down 8 days on February’s figure of 60. West Coast had the second highest median days to sell across the country at 48 days, down 8 days on the same time last year and was the lowest for the month of March for 5 years.

“Looking across the country, 11 out of 16 regions had a median number of days to sell under 30 days – that’s the highest number of regions since December 2003 (16 years, 3 months). This figure has only been exceeded once since January 1992 when we started collecting records,” says Norwell.

NZ & Auckland see highest percentage of auctions in 40 months

Auctions were used in 20.4% of all sales across the country in March, with 1,404 properties selling under the hammer – up from the same time last year, when 13.0% of properties (938) were sold via auction. This was the highest percentage of auctions in 40 months – since November 2016.

Gisborne had the highest percentage of sales by auction across the country with 47.7% (or 21 properties) in the region sold under the hammer – up from 30.0% (15 properties) in March 2019.

Auckland had the second highest percentage of auctions in the country with 40.2% (928 properties) sold under the hammer, up from 24.7% (514 properties) in March 2019 – the highest percentage of auctions for Auckland in 40 months.

Bay of Plenty saw the third largest percentage of sales by auction with 19.4% (86 properties) sold under the hammer up from 12.2% in March 2019 (60 properties).

Inventory

The total number of properties available for sale nationally decreased by -26.7% in March to 20,702 down from 28,228 in March 2019 – a decrease of 7,526 properties compared to 12 months ago and the lowest level of inventory for the month of March since records started in 2007.

Regions with the largest percentage decrease in total inventory levels were:

• Taranaki: -44.5% from 695 to 386 – 309 fewer properties
• Marlborough: -41.2% from 391 to 230 – 161 fewer properties
• Gisborne: -29.9% from 134 to 94 – 40 fewer properties
• Canterbury: -29.2% from 4,006 to 2,837 – 1,169 fewer properties.

Gisborne and Wellington had the lowest number of weeks’ inventory with 7 weeks inventory available to prospective purchasers, down on last year’s figure of 11 weeks and 8 weeks respectively.

This was followed by Hawke’s Bay with 8 weeks’ inventory. Manawatu/Wanganui came in fourth with 10 weeks’ inventory available to prospective purchasers.

West Coast had the highest number of week’s inventory with 68 weeks’ inventory available to prospective purchasers. Northland was the next highest with 40 weeks’ inventory available.

Price Bands

The number of homes sold for less than $500,000 across New Zealand fell from 38.6% of the market (2,781 properties) in March 2019 to 27.6% of the market (1,896 properties) in March 2020. This is the lowest percentage of sales sold for below the $500,000 mark since records started in 1992.

The number of properties sold in the $500,000 to $750,000 bracket increased from 30.4% in March 2019 (2,191properties) to 32.3% in March 2020 (2,220 properties).

At the top end of the market, the percentage of properties sold for $1 million or more increased from 14.9% (1,073 properties) in March 2019 to 20.0% (1,376 properties) in March 2020. This is the highest percentage of sales sold for more than $1 million since records started in 1992.

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