Normally one month out from an election, sales volumes begin easing off, however 2020 appears to continue in its trend of being an anomaly, says REINZ Chief Executive Bindi Norwell
The number of residential properties sold in September across New Zealand increased by 37.1% from the same time last year (from 6,112 to 8,377) – the highest number of properties sold in a month in New Zealand for 42 months (March 2017) and the highest number of properties sold in a September month for 14 years, according to the latest data from the Real Estate Institute of New Zealand (REINZ).
For New Zealand excluding Auckland, the number of properties sold increased by 29.9% when compared to the same time last year (from 4,245 to 5,516) – also the highest for the month of September in 14 years.
In Auckland, the number of properties sold in September increased by 53.2% year-on-year (from 1,867 to 2,861) – the highest in 52 months and the highest annual increase in sales volumes in 11 years.
In addition to Auckland, regions with the largest increase in annual sales volumes during September were:
- Nelson: +66.2% (from 65 to 108 – 43 more houses) – the highest for the month of September in 17 years
- West Coast: +57.9% (from 38 to 60 – 22 more houses) – the highest sales volumes for the region since May 2018
- Tasman: +42.5% (from 73 to 104 – 31 more houses) – the highest for a September month since records began
- Canterbury: +39.0% (from 844 to 1,173 – 329 more houses) – the highest sales volumes for the region in 54 months (March 2016)
- Waikato: +37.8 (from 658 to 907 – 249 more houses) – the highest sales volumes for the region in 52 months
- Manawatu/Wanganui: +37.3% (from 322 to 442 – 120 more houses) – the highest for a September month in 14 years
- Marlborough: +36.5% (from 63 to 86 – 23 more houses) – the highest for a September month in 14 years
- Bay of Plenty: +31.2% (from 442 to 580 – 138 more houses) – the highest sales volumes for the region in 42 months.
No regions saw an annual decrease in sales volumes; however, Gisborne’s sales volumes remained the same as September last year with 39 properties sold during the month, and this was up by 1 sale from August.
“Highlighting just how much sales volumes around the country continue to defy expectations, 13 regions had annual sales volumes increases in excess of 20% and 10 regions had increases in excess of 30% – the highest number of regions with this level of sales volume increase since April 2015,” Norwell says.
“Much of this activity is being driven by the extremely low rates at which people can borrow money, which is at its lowest levels since records began, consumers having additional ‘cash’ available due to a lack of international travel and some uplift from returning ex-pats. When you then add in high levels of confidence in the housing market, the removal of the LVRs back in March and people’s fear that prices are just going to keep increasing in the future, then this explains why people are going to such lengths to secure a property now,” points out Norwell.
“At this point in time there are no signs on the horizon pointing to a change in the next few months, so it will be interesting to see if things slow down in October as the election actually happens or whether sales volumes just continue rising,” she continues.
9 regions hit record median prices in September along with NZ and NZ excl. Auckland
Median house prices across New Zealand increased by 14.7% from $596,956 in September 2019 to a new record high of $685,000 in September 2020, and up from $675,000 in August this year (a 1.5% lift).
Median house prices for New Zealand excluding Auckland increased by 17.0% from $500,000 in September last year to a new record median price of $585,000, and up from $570,000 in August this year (a 0.7% increase).
Additionally, Auckland’s median house price increased by 12.6% from $848,000 at the same time last year to $955,000 a new record high, and up from $949,500 in August this year (a 0.6% increase).
In total nine regions saw record median prices during September. Regions in addition to Auckland with record median prices were:
- Gisborne with a 45.8% increase from $384,000 in September last year to $560,000 this September
- Taranaki with a 21.3% increase from $400,000 in September last year to $485,000 this September. Additionally, New Plymouth District had a record median price of $570,500
- Otago with a 20.7% increase from $489,000 in September last year to $590,000 this September. Additionally, Dunedin City had a record median price of $568,000
- Bay of Plenty with a 17.8% increase from $602,000 in September time last year to $709,000 this September and the first time the median has gone over the $700,000 mark. Additionally, Tauranga City ($780,000), Western Bay of Plenty District ($755,000), Rotorua District ($521,000) and Whakatane District ($661,000) also had record median prices
- Manawatu/Wanganui with a 16.6% increase from $397,000 in September last year to $463,000 this September. Additionally, Whanganui District had a record median price of $400,000
- Wellington with a 13.1% increase from $650,000 in September last year to $735,000 this September. Additionally, Lower Hutt City ($702,000), Upper Hutt City ($710,000), Wellington City ($862,000) and Kapiti Coast District ($704,400) had record median prices
- Waikato with a 14.4% increase from $555,000 in September last year to $635,000 this September. Additionally, Hamilton City ($676,000) and Taupo District ($630,000) had record median prices
- Canterbury with an 11.1% increase from $450,000 in September last year to $500,000 this September. Additionally, Christchurch City ($503,000), Kaikoura District ($595,000) and Timaru District ($392,000) also had record median prices.
“Prices across the country have seen some significant increases, with once again every region in New Zealand seeing an annual uplift in median house prices. More than half of the regions saw record median prices in September, as did 19 territorial authorities; and only two regions didn’t see double-digit increases showing just how strong the market is at the moment,” says Norwell.
“With interest rates at such low levels, investors are starting to head back into the market in high numbers and they’re competing with first time buyers for properties which is also contributing to the price rises we’re seeing in this bracket. This is making it harder for first time buyers to get on the property ladder – even with the removal of LVRs,” suggests Norwell.
“Looking at some of the regions, there has been some very strong price growth with the likes of the Waikato seeing a record median price for 5 months in a row now. Similarly, Taranaki and Manawatu/Wanganui have had three consecutive months of record median prices. Additionally, Rotorua District, Tauranga City, Lower Hutt City and Upper Hutt City have had two months in a row of record median prices showing that price rises are impacting most parts of the country at the moment
“These sort of price increases have continued to defy even the most bullish of market commentators, but with no uplift in the total pool of properties available for sale, at this point it looks as if prices will continue to rise as we head toward Christmas,” continues Norwell.
REINZ House Price Index (HPI) reaches another new high
The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 11.1% year-on-year to 3,145 a new high and the first time the index for New Zealand has gone over the 3,100 mark.
The HPI for New Zealand excluding Auckland increased 10.9% from September 2019 to 3,105 a new high.
Auckland’s HPI increased 11.4% year-on-year to 3,194 also a new high on the index.
In September, Gisborne/Hawke’s Bay again had the highest annual growth rate with a 15.8% increase to a new record index level of 3,350. In second place was Wellington with an annual growth rate of 14.5% to a new record index level of 3,182 and in third place was Southland with a 13.1% annual increase to a new record index level of 3,555.
The 3 month data for New Zealand showed an uplift of 6.2% the highest percentage increase in 201 months despite the impact of COVID-19.
Even the 1 month data is looking very strong, with all regions seeing an uplift in value for the first time in 7 months.
Days to sell lowest for a September month in 4 years
In September, the median number of days to sell a property nationally decreased 4 days from 36 to 32 when compared to September 2019, the lowest for the month of September in 4 years, and the lowest days to sell since March 2020 (30 days) just as COVID-19 hit New Zealand’s shores.
For New Zealand excluding Auckland, the median days to sell decreased by 5 days from 34 to 29, the lowest for the month of September in 15 years.
Auckland saw the median number of days to sell a property decrease by 3 days from 39 to 36 year-on-year, the lowest for the month of September in 4 years.
Manawatu/Wanganui had the lowest days to sell of all regions at 23 days – down 2 days from the same time last year and down 3 days from August. This was the lowest days to sell for Manawatu/Wanganui for a September month since records began.
Taranaki and Marlborough had the second lowest median days to sell in September at 24 days, down 9 and 15 days respectively when compared to same time last year. For both regions this was the lowest median days to sell in a September month since records began.
The West Coast again had the highest days to sell for the country at 49 days, down 66 days on last year’s figure.
“Exactly half of the regions across the country saw the median number of days to sell a residential property below the 30 mark in September – this is more like what we would see in a March month, showing how the current fear of missing out, strong confidence levels and numerous auction dates being brought forward due to strong offers are continuing to see the amount of time it takes to sell a house drop,” continues Norwell.
Auctions levels keep going up
Auctions were used in 16.5% of all sales across the country in September, with 1,381 properties selling under the hammer – up from 13.1% at the same time last year, when 802 properties were sold via auction and up from 15.9% in August this year. This was the highest percentage of auctions for the month of September in 4 years.
Gisborne had the highest percentage of auctions across the country with a record 74.4% (29 properties) sold under the hammer, up from 30.8% (12 properties) in September 2019.
Auckland had the second highest percentage of auctions in New Zealand with 27.9% of properties (799 properties) sold under the hammer up from 25.9% at the same time last year (483 properties).
In third place was Bay of Plenty with 22.9% (133 properties) sold under the hammer up from 11.8% in September 2019 (52 properties). This was the highest percentage of auctions for the month of September in 4 years.
Inventory falls YOY for 15 months in a row & lowest level of inventory on record again
The total number of properties available for sale nationally decreased by -17.0% in September to 17,576 down from 21,174 in September 2019 – a decrease of 3,598 properties compared to 12 months ago and the lowest level of total inventory since records began. Additionally, 8 regions had their lowest levels of inventory ever.
No regions saw an annual increase in inventory level during September.
Regions with the largest percentage decrease in total inventory levels were:
- Taranaki: -50.7% from 538 to 265 – 273 fewer properties
- Marlborough: -37.4% from 257 to 161 – 96 fewer properties
- Northland: -32.8% from 1,316 to 885 – 431 fewer properties.
Wellington again had the lowest number of weeks’ inventory with six weeks inventory available to prospective purchasers, two weeks less than last year’s figure. The second lowest level of inventory was Manawatu/Wanganui with only 7 weeks’ inventory available down from 11 weeks at the same time last year. This was followed by Hawke’s Bay and Nelson both with 8 weeks’ inventory – down from 9 and 14 weeks’ respectively.
West Coast had the highest number of week’s inventory with 54 weeks’ inventory available to prospective purchasers up from 37 weeks at the same time last year. Northland was the next highest with 25 weeks’ inventory available, down from 35 weeks last year.
The number of homes sold for less than $500,000 across New Zealand fell from 36.3% of the market (2,221 properties) in September 2019 to 24.9% of the market (2,088 properties) in September 2020 – this is the first time on record that more than 75% of the market has sold for more than $500,000.
The number of properties sold in the $500,000 to $750,000 bracket remained flat 32.4% (2,716 properties).
At the top end of the market, the percentage of properties sold for $1 million or more increased from 14.0% (854 properties) in September 2019 to 22.2% (1,860 properties) in September 2020 the highest percentage for a September month since records began.