The latest REINZ property data is in, and confirms that the housing market continues to be buoyant, with Auckland median house prices hitting the $1 million mark and other nine regions seeing record median prices.
Read on for our monthly property market update.
Record median prices in 10 regions
Median house prices across New Zealand increased by 19.8 per cent year-on-year during October, and by 15.4 per cent excluding Auckland.
In total, 10 regions saw record median prices, including:
- Auckland: up 16.3 per cent to $1 million.
- Gisborne: up 34.1 per cent to $570,000.
- Marlborough: up 26.8 per cent to $565,000.
- Otago: up 22.7 per cent to $652,000.
- Wellington: up 20.8 per cent to $785,000.
- Manawatu/Wanganui: up 17.5 per cent to $470,000.
- Northland: up 16.5 per cent to $600,000.
- Bay of Plenty: up 16.2 per cent to $720,500.
- Waikato: up 15.9 per cent to $655,000.
- Canterbury: up 9.7 per cent to $510,000.
Housing affordability under the spotlight
“October 2020 will go down in ‘housing history’ as being the point in time when Auckland region’s median house price hit the million-dollar mark for the first time – something no one anticipated or expected just six month after the entire country came out of lockdown,” said REINZ chief executive, Bindi Norwell.
However, Norwell also pointed out that this significant milestone raises key questions in terms of housing supply and affordability for Auckland first-home buyers. “It highlights just how important it is that legislation, such as the RMA, is re-addressed quickly by the current government so it is fit for purpose to help support more houses being built at speed and at scale,” Norwell said.
On this note, in October the total number of listings across New Zealand dropped by 18.7 per cent year-on-year, and five regions (Bay of Plenty, Marlborough, Northland, Southland and Waikato) had their lowest levels of inventory ever.
Highest annual sales volumes in New Zealand in 53 months
It’s not just house prices that are skyrocketing across New Zealand. The number of residential properties sold in October nationwide increased by 25 per cent year-on-year – the highest sales volumes since May 2016 (53 months), and the highest October sales count since October 2006 (14 years).
Among the regions that saw the largest increase in annual sales volumes were:
- Auckland: up 50.9 per cent year-on-year.
- Gisborne: up 43.2 per cent.
- Waikato: up 30.4 per cent.
- Marlborough: up 29.3 per cent.
- West Coast: up 28.2 per cent.
- Taranaki: up 24.5 per cent.
- Southland: up 23.2 per cent
“Again, we’ve seen more than half (9 out of 16) of the regions across the country with annual sales volume increases in excess of 20 per cent in October – this is just not what anyone expected to happen and shows just how much people’s concern around future price rises is adding to their determination to buy now before prices potentially rise even further,” said Norwell.
Key factors at play
Just like we’ve seen in previous months, several factors continue to underpin the property market, pushing up prices across the country. Among these – according to Norwell – are low interest and mortgage rates, the diversion of spend on overseas travel to property, expat Kiwis returning home, the removal of Reserve Bank-enforced LVR restrictions on banks and an overall lack of listings.
Earlier this month, the Reserve Bank announced that it would look at reintroducing LVRs in March 2021 – a surprise move that could have a dampening effect on house price growth in the coming months.
“Given the price rises we’ve seen over the past few months, we wouldn’t be surprised if the Reserve Bank goes ahead with its proposal to reinstate LVRs before the 12-month period is up – particularly for investors,” Norwell pointed out.
Planning a property move in 2021?
If you’re looking at buying property in the new year 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’re keeping a close eye on mortgage rate trends and forecasts, to ensure 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.