REINZ September Data: Lockdown Curtails Auckland Activity, The Rest Of New Zealand Begins To See Spring Lift

Median prices for residential property across New Zealand increased by 15.4% to $795,000 in September 2021 compared to $689,000 in September 2020, 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.

Seven out of 16 regions reached new record median prices — the most since April 2021. Nine regional records were reached in September 2020, however, this month’s total number of records remains above average for a September month.

The median house price for New Zealand excluding Auckland increased by 23.1% from $585,000 in September 2020 to a new record of $720,000. This figure marks an increase of 2.9% from August 2021 ($700,000) and indicates that confidence remains in the property market after the easing of COVID-19 Alert Level restrictions outside of Auckland.

The median house price in Auckland increased 20.4% to $1,150,000 from $955,000 in September 2020. However, this figure was down 4.2% from its record $1,200,000 in August 2021. All Auckland districts show year-on-year median price growth. Pockets of the Auckland region show month-on-month growth; the median house price in North Shore City was $1,330,000 in September 2021 (up 2.7% on August 2021) and Papakura District reached $1,060,000 (up 13.4% on August 2021) — a record median price for the Papakura District.

The seven regions that reached record median prices in September were:

• Bay of Plenty: increased 24.2% to $878,000, up from $707,000 in September 2020. Additionally, Tauranga City ($990,000) and Whakatane District ($695,000) reached record median highs
• Hawke’s Bay: increased 31.6% to $770,000, up from $585,000 in September 2020. Additionally, Central Hawke’s Bay District ($615,000) and Hastings District ($812,000) reached record median highs
• Manawatu/Wanganui: increased 35.4% to $626,000, up from $462,500 in September 2020 and has had a record price or equal in 11 of the past 12 months. Additionally, Manawatu District ($720,000) and Tararua District ($500,000) reached record median highs
• Tasman: increased 27.4% to $860,000, up from $675,000 in September 2020
• Nelson: increased 24.5% to $802,000, up from $644,165 in September 2020
• Canterbury: increased 31.0% to $660,000, up from $504,000 in September 2020. Additionally, Christchurch City ($670,000), Hurunui District ($651,000), Selwyn District ($775,000), and Waimate District ($395,000) reached record median highs
• Southland: increased 29.1% to $437,580, up from $339,000 in September 2020. Additionally, Invercargill City ($455,000) reached a record median high

Jen Baird, Chief Executive at REINZ, says: “September was always going to be a month to watch as we assess the impact various COVID-19 Alert Levels have on the New Zealand property market. What the data shows, is that confidence remains high, buyer demand is still strong, and outside of Auckland, buyers will be pleased to see more property coming to the market. Prices are proving resilient, with some regions noting a decrease in the number of first home buyers, in part due to rising prices.

“Median house prices across New Zealand increased by 15.4% to $795,000 in September 2021 compared to $689,000 in September 2020. However, this was down 6.5% on August 2021. New Zealand excluding Auckland showed year-on-year growth of 23.1% and an increase of 2.9% on August 2021, suggesting that as alert levels ease the market is beginning to see a lift,” Baird adds.

“Looking at Auckland in particular, while the median house price is down slightly on its August record of $1,200,000, all districts increased year-on-year with the Papakura District reaching a new median high. Auckland spent the first three weeks of September in alert level 4 lockdown, which restricted real estate activity. What we have seen in most other parts of the country is that activity picks up as restrictions ease, and we expect the same in Auckland,” she continues.

“The REINZ House Price Index reached a new national high of 4,088, showing that the underlying value of property remains strong. Growth was distributed across all regions, with 11 of the 12 regions reaching a record level in September. Manawatu/Wanganui saw year-on-year growth of 45.8%. Bay of Plenty (37.2%), Gisborne/ Hawke’s Bay (36.8%), and Wellington (34.9%) all saw particularly strong annual growth increases,” Baird notes.

“Various levels of lockdown across New Zealand have influenced activity in the real estate market this month lending to mixed results. We expect to see a rise in activity as restrictions ease further, especially in Auckland. Demand suppression measures introduced this year, recent moves by the Reserve Bank to increase the OCR, and COVID-19 restrictions to real estate activity are creating headwinds for house prices and we can see that the pace of price rises has slowed over recent months,” Baird concludes.

Number of sales across New Zealand decreases

The number of residential property sales across New Zealand decreased by 37.9%, from 8,673 in September 2020 to 5,385 in September 2021 – the fewest properties sold in a September month since 2011. September’s sales are a result of varying lockdown alert levels across the country that have curtailed real estate activity as we all take action to prevent the spread of COVID-19.

For New Zealand excluding Auckland, the number of properties sold in September 2021 decreased 28.7% year-on-year to 4,047. However, sales increased 13.8% compared to August 2021 (3,557).

New Zealand excluding Auckland returned to Alert Level 3 at the beginning of September. During the week 1 September to 7 September, the number of sales was 677 — compared to 577 the last week of August under Alert Level 4. In the following weeks, as the country excluding Auckland moved to Alert Level 2, a steady increase was maintained, reaching 854 in the week 8 September to 14 September, 918 in the week 15 September to 21 September, and 1,035 in the week 22 September to 28 September.

In Auckland, the number of properties sold in September decreased by 55.3% year-on-year (from 2,996 to 1,338). This is a significant decrease, illustrating the impact of the prolonged lockdown in the region. While the profession was able to complete sales virtually, the continuation of Alert Level 4 into September saw a further drop in activity in Auckland. In the first three weeks, under Alert Level 4, the number of sales was 299 (1 to 7 September), 255 (8 to 14 September), and 239 (15 September to 21 September) before seeing an uplift with the move to Alert Level 3 in the week 22 to 28 September, where 344 sales were recorded. As restrictions ease in the region, it is expected sales will continue to rise.

Regions with the greatest annual percentage decrease in sales volumes were:

• West Coast: -56.7% (from 60 to 26 – 34 fewer houses) – the lowest sales count since March 2020 and the lowest for a September month since 2015
• Auckland: -55.3% (from 2,996 to 1,338 – 1,658 fewer houses) — the lowest sales count since April 2020 and the lowest for a September month on record
• Nelson: -48.2% (from 110 to 57 – 53 fewer houses) — the lowest for a September month on record.

“The effect of COVID-19 is most telling when we look at sales. Lockdown has had an impact on sales across New Zealand, with a decrease of 37.9% compared to September last year, and a decrease of 9.7% on the prior month.

“While alert level restrictions have had an impact on the ability and confidence of people to buy and sell across the country, as alert levels have eased in regions, we have seen an increase in the number of properties sold. Comparatively, Auckland activity remains low, with the region experiencing its lowest sales count (1,338) since April 2020 and its lowest count for a September month. It’s interesting to note that the drop has not been as sharp as in the first full lockdown back in 2020. The use of digital solutions across the real estate profession has enabled activity to carry on to a degree, with virtual auctions continuing throughout September,” Baird continues

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“While spring activity may be delayed in some regions of the country, we expect that as alert level restrictions ease more properties will come on to the market. Over the period, interest in the market has remained high, and we expect to see this reflected in the data post-lockdown as more properties are listed resulting in an increase in sales,” she adds.

REINZ HPI shows house values continue upward trajectory

The REINZ House Price Index (HPI) for New Zealand, which measures the changing value of property in the market, showed an increase of 30.4% year-on-year to 4,088 – reaching a new high on the index. This is the fourteenth consecutive month we have seen a new high.

The HPI for New Zealand excluding Auckland showed an increase in house price values of 34.4% from September 2020 to 4,149 in September 2021, a new high on the index and the highest annual percentage increase since records began.

Auckland’s house price values increased 25.5% year-on-year to 4,009 – breaching the 4,000 mark for the first time. Taranaki was the only region to not reach a new high on the REINZ House Price Index in September.

Manawatu/Wanganui again had the highest annual growth rate in house price values with a record index level of 5,186 – a 45.8% increase in September. The region has had the top year-on-year movement in HPI of all regions for five months in a row. Canterbury (+36.2%) and Northland (+33.7%) had their largest year-on-year increases in HPI since records began. Southland has had the lowest or second lowest year-on-year movement in HPI of all the regions for six months running.

Other notable movers include Bay of Plenty, which increased 37.2% on last year to 4,292, and Gisborne/ Hawke’s Bay, with an annual increase of 36.8% to 4,586.

Median days to sell increases due to lockdown restrictions

The median number of days to sell a property increased by 5 days across New Zealand, from 32 days in September 2020, to 37 in September 2021.

For New Zealand excluding Auckland, the median number of days to sell increased by 8 days from 29 to 37 days in September 2021.

Auckland saw a decrease of 1 day in the median number of days to sell a property – from 36 in September 2020 to 35 in September 2021 — the lowest September median days to sell since 2007. This suggests that while there were fewer properties being sold, those that were coming to the market were still attracting buyers willing to make a decision irrespective of lockdown. The West Coast saw the median number of days to sell decrease from 49 in September 2020 to 36 in 2021 — also the lowest since 2007.

All other regions — other than Northland which had no change — saw an increase in the median number of days to sell compared to September 2020. Five regions had a median days to sell of over 40 days, the most this category has seen since June 2020. No regions had a median days to sell under 30, the first time this has happened since May 2020.

Properties in Southland sold the fastest, with a median number of days to sell of 31 in September 2021. It was the only region to have a lower median days to sell than August 2021. Gisborne and Tasman had the highest days to sell of any region in September at 43 days. Marlborough, Nelson, Otago and Tasman had their highest September median Days to Sell since 2014.

“This month we noted an increase in the median days to sell in most areas. Auckland and the West Coast were the only regions to see a decrease. Under current restrictions, travel between some regions is by exception only and with open homes not possible the sales process is taking a little longer,” states Baird.

Percentage of New Zealand homes sold by auction remains high

Across New Zealand, 22.0% of properties sold by auction in September – compared to 16.1% in September 2020. Auctions in New Zealand excluding Auckland accounted for 19.0% of sales, up from 10.3% last year.

“Auctions remained a popular method of sale, with online auctions again proving effective throughout the various alert levels. Virtual auctions have enabled vendors to continue their sales process and afforded buyers the transparency auctions provide. In September, auctions accounted for 22% of sales across New Zealand,” says Baird.

Gisborne had the highest percentage of auctions across the country with 50% of properties selling by auction (19), though this was down from 75% (30) at the same time last year.

Canterbury had the second highest percentage of auctions in New Zealand with 36.9% (312) properties sold by auction in September up from 16.8% in September 2020 (204 properties).

In third place was Bay of Plenty with 33.9% (129 properties) sold by auction – up from 22% (133 properties) in September last year.

Auckland had 31.4% (420) properties sold by auction, up from 27% of properties in September 2020 (810), but down from 39% in August 2021 (939).

Low levels of inventory prevail

The total number of properties available for sale in New Zealand decreased year-on-year by 23.7% in September 2021 to 13,407, down from 17,576 in September 2020 – 4,169 fewer properties compared to 12 months ago. However, this is an increase of 9.5% from August 2021.

“The volume of inventory available continues to inhibit activity in the market. While inventory levels were down year-on-year, we have seen an increase when compared to August 2021, which is great news for buyers. Unsurprisingly, Auckland saw the greatest decrease in listings year-on-year in September. Positively, there was an uplift in other regions under lower alert levels. Hawke’s Bay and Wellington saw a significant annual percentage change of 15.2% and 14.5% respectively,” Baird says.

“As New Zealand excluding Auckland moved into Alert Level 3 at the beginning of September and to Alert Level 2 shortly after, what has emerged is a tale of two alert levels. Sales in New Zealand excluding Auckland saw a 13.8% increase from August 2021, as more real estate activity was allowed and those thinking of selling their homes had the confidence to bring them to market. We expect to see this same pattern as restrictions slowly ease for Auckland,” Baird adds.

Gisborne again saw an annual uplift in inventory levels with a 20.0% increase from the same time last year, increasing from 65 properties in September 2020 to 78 properties in September 2021 – 13 additional properties. Wellington showed an increase of 21.8% — from 687 in September 2020 to 837 in 2021. Manawatu/Wanganui saw an increase of 14.4% — from 466 properties in September 2020 to 533 properties in September 2021.

Regions with the largest decrease were the West Coast -49.6% (from 236 in September 2020 to 119 in 2021), Northland -45.0% (from 885 in September 2020 to 487 in 2021), and Canterbury -36.6% (from 2,396 in September 2020 to 1,518 in 2021).

Inventory data comes from realestate.co.nz.

$1m+ properties still holding strong

14% (753 properties) of homes sold across New Zealand in September 2021 sold for less than $500,000. This is a drop from 24.7% of the market (2,146 properties) in September 2020 — a minor increase from August 2021 where 13.6% of properties sold for less than $500,000.

The number of properties sold in the $500,000 to $750,000 bracket fell from 32.4% (2,808 properties) to 30.5% (1,640 properties).

At the top end of the market, the percentage of properties sold for $1 million or more increased from 22.3% (1,938 properties) in September 2020 to 31.2% (1,679 properties) in September 2021.

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