New Zealand’s property market shook off predictions of a slowdown in October, posting more price growth and a big bounce in sales.

The Real Estate Institute (REINZ) has released its latest data for the month, which again shows a market in strong spirits, despite ongoing restrictions in Auckland.

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Prices lift

There was no sign of September’s “spring dip” continuing in October, with median prices lifting steadily across New Zealand.

The median price lifted 23.4 per cent nationwide compared to a year earlier, and 10 of the regions that REINZ monitors hit a record price, including Waikato, Bay of Plenty, Hawke’s Bay, Taranaki, Wellington and Canterbury.

Outside Auckland, the median house price was up 25.5 per cent to $753,000 while in Auckland it was up by 25 per cent to $1.25 million.

“The same factors continue to drive price increases — supply, demand and relatively low interest rates. There is also a sense of FOMO [fear of missing out] driving buyers for now,” REINZ chief executive Jen Baird said.

“House prices continue to show steady growth. Government measures to temper investor demand and recent moves by the Reserve Bank to increase OCR are causing headwinds for house prices. However, the long-term impacts are yet to be seen. We saw the initial lockdown impact on the market in August and September, with market activity slowing. However, October data announces the arrival of spring activity,” Baird said.

Commentators expressed surprise at the strength shown in the numbers.

Kiwibank economist Jeremy Couchman said the housing market appeared “resistant to the worst Delta can throw at it”.

At Infometrics, Paul Barkle said the increase in price between October and September was the fastest rate of growth since February. He said that was likely to be driven by a lack of listings for buyers to choose from. “Broadening of the bright-line rules earlier in the year will also be crimping the supply of houses for sale.”

Sales jump

October was notable for the increase in activity month-on-month. 

While sales activity was down 21.7 per cent year-on-year, there were 30.3 per cent more sales in October than in September, which REINZ said was due to easing Covid-19 restrictions, as well as a natural spring lift and growing confidence in buyers and sellers to make decisions about their housing needs.

In Auckland, while the number of sales was down 20.3 per cent year-on-year, to 2576, there were 85.5 per cent more homes sold in October than in September.

Baird said Auckland had found its rhythm again and people had worked out how to conduct real estate business around the restrictions.

Tasman had its highest sales count since November 2020, and Bay of Plenty had its highest since March 2021.

The median number of days to sell a property increased by five days across New Zealand, from 29 days in October 2020 to 34 in October 2021. For New Zealand excluding Auckland, the median number of days to sell increased by one day from 29 to 30 days in October 2021.

Couchman said Auckland’s increase in days to sell, up by nine to 45, showed the impact of lockdown continued.

“Days to sell will come down as restrictions are relaxed, as they have already done elsewhere across the motu,” he said.

He added that the rate of sales was still well below what had been seen before the latest delta lockdown and it was likely that activity would remain more subdued, even though the market was holding up better than many expected.

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