The number of residential properties sold in February 2021 was the highest recorded in the month in the last 14 years – with a 14.6 per cent increase from the same time in 2020. Median house prices across the country rose by a record 22.8 per cent year-on-year.
A similar trend of record-high sales and prices has been going on in the last few months. So, what is keeping up the pace of property sales in New Zealand? Check out our latest property market update.
Market rush before upcoming regulations
According to the latest data from the Real Estate Institute of New Zealand (REINZ), February 2021 saw an influx of property buyers and investors in the market, largely due to a fear of missing out on low interest rates and the announced return of Reserve Bank-enforced LVR restrictions from March 2021.
Bindi Norwell, Chief Executive at REINZ said, “It’s highly likely that some of this uplift can be attributed to both investors and owner-occupiers looking to purchase ahead of the LVR restrictions coming back into effect in March and the slight uplift in listings we’ve seen over the last couple of months.”
Out of 16 regions, nine had annual sales volumes increases for the month of February. Of these, the Auckland region saw one of the highest spikes in sales volumes across the country. Residential property sales went up by 34.6 percent from the same time last year – hitting record-high February sales in 14 years.
Interestingly, West Coast saw unprecedented growth in sales volumes, with a 58 per cent spike from February 2020 – the highest in 17 years, and the highest ever recorded for the month of February.
Norwell adds, “Conversations with local agents have highlighted that there has been an uplift in enquiries across the region in part due to the affordability of the West Coast, but also for lifestyle reasons and that expectations are the West Coast is likely to remain busy for the next couple of months.”
Besides Auckland and West Coast, other increased sales volumes regions included:
- Taranaki: +31.4 per cent (from 153 to 201 houses, highest February sales in 4 years)
- Northland: +22.5 per cent (from 191 to 234 houses, highest February sales in 4 years).
On the other hand, seven regions saw annual decreases in sales volumes, led by:
- Marlborough: -24.7 per cent (from 89 to 67 properties)
- Hawke’s Bay: -22.3 per cent (from 265 to 206 properties)
- Gisborne: -17.9 per cent (from 78 to 64 properties)
- Tasman: -17.9 per cent (from 78 to 64 properties).
Median house prices continue to record new highs
The country’s median residential price hit a record high in February 2021, going up to $780,000 from $635,000 in February 2020. Median house prices in February, excluding Auckland, rose by 19.1 per cent from $550,000 to $655,000 year-on-year.
Auckland’s median house price increased by 24.3 per cent, from $885,000 same time last year, to $1,100,000 – a new record for the region. Nine other regions recorded the highest median house prices for February, including:
- Bay of Plenty: +26.8 per cent, from $669,00 $848,250 year-on-year. Additionally, Rotorua District ($617,000), Tauranga City ($905,000) and Western Bay of Plenty District ($855,000) all reached record median highs in February
- Wellington: +24.0 per cent, from $718,000 to $890,000 year-on-year. Additionally, Lower Hutt City ($839,000), Masterton District ($640,000), Porirua City ($980,000), Wellington City ($1,100,000) and South Wairarapa District ($782,000) all reached record median highs in February
- Waikato: +23.0 per cent, from $580,000 to $713,500 year-on-year. Additionally, Hamilton City ($750,000), Taupo District ($690,000), Thames-Coromandel District ($865,000), Waikato District ($675,000) and Waipa District ($760,000) all reached record median highs in February
- Hawke’s Bay: +36.4 per cent, from $516,000 to $704,000 year-on-year. Hastings District ($772,300) reached a record median high in February.
Check out the full report for details about the other regions.
What is expected of the property market?
According to independent economist Tony Alexander, while the market “frenzy” seems to keep on going, house price growth rate has slowed down from the last few months of 2020.
Real estate surveys conducted by Alexander revealed signs that fewer investors are seeking professional advice than before, and a higher number of investors are looking to sell their properties. The data shows investor activity in the market coming down after a period of high activity, even before the return of RBNZ-enforced LVRs on 1 March.
There also appears to be greater competition between first-home buyers and investors when it comes to regions at the lower end of the housing market, according to QV general manager David Nagel: “I expect that one day in the not-too-distant future we’ll get to the point where potential purchasers reach their credit limits and some of that competition putting upward pressure on prices begins to dry up as a result.”
Planning a property move in 2021?
If you’re looking to get into the property market in 2021, or would like to make the most of low mortgage rates to pay off your home loan faster, please don’t hesitate to contact us. As always, we are keeping a close eye on mortgage rates, to ensure that we provide you with the most up-to-date advice and guidance.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.