Once again, the NZ property market set new records in September – the highest number of properties sold in a month for 42 months (March 2017), and the highest number of properties sold in a September month for 14 years.
Read on for our monthly housing market update, where we break down the latest data from the Real Estate Institute of New Zealand (REINZ).
Strong sales volumes across the country
For New Zealand, the number of properties sold increased by 37.1 per cent year-on-year including Auckland, and 29.9 per cent year-on-year excluding Auckland. In the ‘City of Sails’ alone, sales volumes increased by 53.2 per cent year-on-year – the highest in 52 months as well as the highest annual increase in 11 years.
No regions saw their sales volumes decrease, but in some areas the increase was particularly pronounced:
- Nelson: up 66.2 per cent (highest increase for the month of September in 17 years)
- West Coast: up 57.9 per cent (highest sales volumes since May 2018)
- Tasman: up 42.5 per cent (highest increase for a September month since records began)
- Canterbury: up 39 per cent (highest sales volumes since March 2016)
- Waikato: up 37.8 per cent (highest sales volumes since May 2016)
- Manawatu/Wanganui: up 37.3 per cent (highest increase for a September month in 14 years)
- Bay of Plenty: up 31.2 per cent (highest sales volumes in 42 months).
2020 continues to be ‘an anomaly’
This year has been an interesting and unusual one to watch in many respects.
It’s a common belief, for example, that our property market tends to flatten out in the weeks leading up to the elections. But despite 2020 being an election year, this hasn’t happened. The question is, why?
“Much of [the market’s] 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 expats,” said REINZ CEO, Bindi Norwell. “When you add in high levels of confidence in the housing market, the removal of the [Reserve Bank-enforced] 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.”
Interestingly, a recent Trade Me Property survey found that Kiwis’ decision to buy or sell property in the next couple of years has little to do with the election results. The vast majority of people surveyed (82 per cent) claimed the election was not a concern, and over half of respondents (52 per cent) said their main concerns were around job security, fluctuating interest rates, and the idea of a recession.
Not only that, but according to Trade Me Property spokesperson Aaron Clancy, this data shows that activity in the property market during an election year doesn’t differ all that much from other years. Is common belief still to be believed?
Predictions still difficult to make
At the moment, Covid-19 seems to have altered the usual landscape, making predictions all the more difficult. What’s becoming clearer as the months roll by is that the market is stronger than expected, and the predicted downturn may not materialise.
“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,” said Norwell.
Use us as a soundboard
If you have a mortgage and are considering refixing it, please don’t hesitate to contact us. Mortgage rates continue to be at their lowest-ever levels, and we can talk you through your options for securing a rate that meets your needs for budgeting and certainty of payment.
If you’re looking to buy property, it’s also a good idea to talk to us early in the process. At the moment, lenders have a slow turnaround time, so getting your mortgage pre-approved as early as possible can give you the green light of confidence, and a solid understanding of what you can afford. We’re here to help.
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 development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.