In January, the number of properties sold across New Zealand hit a record high for the month of January in five years. But results were varied, with some regions recording their lowest January sales volumes in many years.
So, what’s driving the property market at the moment? Read on for our latest property market update.
Fear of missing out (FOMO) continues to boost prices
REINZ’s January housing data show that the summer break did not bring much relief to rising house prices. Alongside the continuing issue of low listings, this January’s housing market performance had another factor in play – buyers’ fear of missing out.
“The fear of future price rises and the fear of missing out lingers deep in buyers’ minds and is impacting people’s buying behaviour as January saw a continuation of properties selling at a rapid pace,” said REINZ chief executive, Bindi Norwell.
“Last month, residential properties sold at their fastest pace for a January month in 17 years, carrying on the pattern we’ve seen over the past few months and therefore continuing to impact pricing.”
Auckland’s median house price rose by 14.9 per cent, from $870,000 to $1,000,000 year-on-year. Median house prices in the rest of the country were sitting at $602,000 in January 2021, up from $525,000 last year.
Record low January sales volumes
Auckland saw a boost in annual sales volumes by 37.6 per cent – the highest for January in 14 years. But outside of Auckland sales volumes decreased by 10.3 per cent year-on-year – the lowest for January in seven years.
Seven regions in the country went through a respite period, with the lowest number of sales seen in years for the month of January:
- Wellington – lowest ever
- Tasman – lowest in 21 years
- Hawke’s Bay – lowest in 10 years
- Marlborough – lowest in 10 years
- Otago – lowest in 10 years
- Manawatu/Wanganui – lowest in nine years
- Taranaki – lowest in six years
Sales volume highs in six regions
Besides Auckland, six other regions saw an annual increase in January sales volumes, with four of them hitting record highs:
- West Coast: +54.1 per cent (20 more houses sold) – the highest in 15 years
- Canterbury: +6.4 per cent (45 more houses sold) – the highest in 14 years
- Northland: +3.8 per cent (six more houses sold) – the highest in five years
- Waikato: +2.8 per cent (14 more houses sold) – the highest in five years
- Southland: +18.4 per cent (21 more houses sold)
- Gisborne: +7.7 per cent (two more houses sold)
What’s next for the property market?
There is some good news for the country’s property market. While the number of listings continues to be down year-on-year, January 2021 had more than 1,400 new listings on the market than December 2020, which is much-awaited news.
It’s not yet clear if this trend will continue in the coming months. What we know is that in most parts of the country, open homes and auctions have been busy during February – a sign that demand for properties remains strong.
“Looking forward to the next couple of months, we would expect sales volumes to continue at a reasonable pace, but again, as we’ve said in the past, this does rely on reasonable levels of new listings coming onto the market and will also depend on what happens with the change in Alert Levels over the coming days,” said Norwell.
Plus, economists believe that the Reserve Bank’s decision to reinstate LVRs in March may dampen the effect of these factors on growing housing prices.
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 rate trends and forecasts, 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 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.