Busiest January In 4 Years Sees Strong Start To New Decade, Says REINZ
The number of properties sold in January across New Zealand was up 3.2% on the same time last year (from 4,459 to 4,603) making it the busiest January in 4 years according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand.
For New Zealand excluding Auckland, the number of properties sold increased by 0.9% when compared to the same time last year (from 3,279 to 3,308) – also the highest for the month of January in 4 years.
In Auckland, the number of properties sold in January increased by 9.7% year-on-year (from 1,180 to 1,295) – the highest number of residential properties sold in the month of January since January 2016.
Regions outside Auckland with the highest percentage increase in annual sales volumes during January were:
- Nelson: +42.6% (from 54 to 77 – 23 more houses)
- Manawatu/Wanganui: +15.3% (from 281 to 324 – 43 more houses) – the highest for the month of January in 3 years
- Bay of Plenty: +11.5% (from 340 to 379 – 39 more houses) – the highest for the month of January in 4 years
- Marlborough: +11.3% (from 62 to 69 – 7 more houses).
Regions with the largest decrease in annual sales volumes during January were:
- Tasman: -29.3% (from 58 to 41 – 17 fewer houses) – the lowest since January 2017
- Southland: -27.2% (from 151 to 110 – 41 fewer houses) – the lowest for the month of January in 6 years
- Otago: -17.1% (from 269 to 223 – 46 fewer houses) – the lowest for the month of January in 9 years.
Bindi Norwell, Chief Executive at REINZ says: “Normally January is a quiet time of the year, and for a few regions that was definitely the case, however, overall the country had a strong start to the year with the most residential properties sold for the month of January in four years.
“Much of the increase in sales volumes is being driven by increasing confidence in the housing market which has been underpinned by a relatively strong economy, good employment rates and the low interest rate environment,” continues Norwell.
“Looking around the country, 10 out of 16 regions saw annual increases in the number of properties sold, with particularly strong uplifts in sales volumes in most of the middle of the North Island and the top of the South Island,” continues Norwell.
“Sales in Auckland were the highest for the month of January in four years, with particularly strong uplifts in sales volumes in North Shore City (+29.0%), Waitakere City (+28.6%) and Rodney District (+21.1%),” points out Norwell.
Record median prices continue in middle of North Island and bottom of the South Island
Median house prices across New Zealand increased by 11.8% in January to $615,000 up from $550,000 in January 2019 and 7 regions saw new record median prices – the highest number in 2 months.
Median house prices for New Zealand excluding Auckland increased by 11.7% to $525,000, up from $470,000 in January last year.
In Auckland, median house prices increased by 8.7% to $875,000 – up from $805,000 at the same time last year. These results are in line with the REINZ House Price Index (HPI) which saw property values in Auckland increase 4.4% annually.
Record median prices were recorded in:
- Waikato with an 8.9% increase to $599,000 up from $550,000 at the same time last year
- Bay of Plenty with a 17.8% increase to $683,000 up from $580,000 at the same time last year
- Hawke’s Bay with a 22.2% increase to $550,000 up from $450,000 at the same time last year
- Manawatu/Wanganui with a 24.5% increase to $411,000 up from $330,000 at the same time last year
- Taranaki with a 9.1% increase to $420,000 up from $385,000 at the same time last year
- Otago with a 19.9% increase to $570,000 up from $475,475 at the same time last year
- Southland with a 28.7% increase to $359,000 up from $279,000 at the same time last year.
Additionally, Canterbury experienced a record equal median price of $465,000 – a record set in October last year.
“January saw all 16 regions with annual increases in the median house price and 7 regions with record median prices, reflecting the sustained pattern we’ve seen over the last year or so where the shortage of housing stock coupled with the increased urgency from buyers has been pushing prices up,” says Norwell.
“This time last year, only the Auckland region had a median price over the $600,000 mark and now the Bay of Plenty, Wellington, Tasman and Nelson regions all have median prices at or over that figure. If things continue in the same manner, before long we wouldn’t be surprised if the Waikato, Otago and potentially Hawke’s Bay regions also have median prices over the $600,000 mark,” points out Norwell.
“Additionally, the Manawatu/Wanganui region has had 7 of the past 8 months with a record median price, Southland has had 6 of the 7 past months with a record median price and Hawke’s Bay has had 5 of the past 6 months with a record median price. Even Queenstown Lakes had a strong start to the year with a median house price of $1,055,000 – the first time in six months the median price has exceeded the million-dollar mark. Unless we see more listings come on to the market in the next few months, we anticipate that prices will continue to rise in a similar pattern,” she continues.
“Looking at Auckland, North Shore City has the highest median price for residential property at $1,101,000, followed by Auckland City on $935,000 and Rodney District close behind with a median of $927,000, Waitakere City also saw a record median of $830,000.
“However, prices in the Capital City have been more mixed with Wellington City at a median price of $755,000 the most affordable it’s been in 7 months yet record median prices were seen in Porirua and Upper Hutt Cities,” continues Norwell.
REINZ House Price Index (HPI) reaches new record high for NZ and 7 regions
The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 7.0% year-on-year to 2,922 – a new record high.
The HPI for New Zealand excluding Auckland increased 9.1% from January 2019 to 2,924 another new record high.
The Auckland HPI increased by 4.4% year-on-year to 2,918 – the highest annual percentage increase in 33 months. It’s also the third positive annual increase in a row after 13 months of negative results.
In January, Manawatu/Wanganui had the highest annual growth rate with a 20.5% increase to 3,480 a new record high. In second place was Southland with an annual growth of 17.7% to a new record high of 3,352 and again in third place was Gisborne/Hawke’s Bay with a 15.4% annual increase to a new record high of 3,085 – only the third time Gisborne/Hawke’s Bay has gone over the 3,000 mark.
In January, 7 out of 12 regions reached record high HPI levels.
Days to Sell lowest for month of January in 3 years
In January the median number of days to sell a property nationally decreased by 6 days from 48 to 42 when compared to January 2019 – the lowest days to sell for the month of January in 3 years.
For New Zealand excluding Auckland, the median days to sell decreased by 4 days from 46 to 42 – the lowest days to sell in 3 years. Auckland saw the median number of days to sell a property fall by 8 days from 51 to 43 year-on-year – the lowest days to sell for the month of January in 3 years.
Gisborne had the lowest days to sell of all regions at 27 days – one of only two regions in the country below the 30 mark and 13 days fewer than the same time last year.
Gisborne, Hawke’s Bay, Manawatu/Wanganui and Taranaki all had the lowest days to sell for the month of January since records began.
Northland had the highest days to sell of any region at 55 days, down 2 days on January 2019, and up 10 days on December 2019’s figure of 45. Waikato had the second highest median days to sell across the country at 49 days – up 1 day on the same time last year, and up 19 days on December 2019’s figure of 30.
Auctions were used in 6.8% of all sales across the country in January, with 312 properties selling under the hammer – up from the same time last year, when 4.5% of properties (200) were sold via auction.
For the first time in 24 months Auckland had the highest percentage of sales by auction across the country with 15.0% (or 194 properties) in the region sold under the hammer – up from 7.2% (85 properties) in January 2019.
The Bay of Plenty had the second highest percentage of auctions in the country with 11.9% (45 properties) sold under the hammer, up from 10.0% (34 properties) in January 2019. Gisborne saw the third largest percentage of sales by auction with 11.5% (3 properties) down from 20.7% in January 2019 (6 properties).
“Whilst January is usually a quiet month in terms of auctions, with many preferring the beach over the auction room, increasing confidence levels in the market tends to see a higher proportion of sales by auction,” says Norwell.
“This is reflected by many of our senior callers around the country who have been reporting a busier start to the year than is usual and also the increasing levels of confidence in the auction room than has been seen for a number of months,” she concludes.
The total number of properties available for sale nationally decreased by -21.7% in January to 19,488 down from 24,878 in January 2019 – a decrease of 5,390 properties compared to 12 months ago and the lowest level of inventory for the month of January in since records began. However, this was an uplift on December’s figure of 18,230.
For the third month in a row, all regions across the country saw an annual decrease in total inventory levels, with the largest percentage decreases seen in:
- Taranaki: -46.9% from 672 to 357 – 315 fewer properties
- Marlborough: -35.5% from 369 to 238 – 131 fewer properties
- Southland: -29.9% from 512 to 359 – 153 fewer properties
- West Coast: -29.4% from 453 to 320 – 133 fewer properties
- Auckland: -22.2% from 9,081 to 7,061 – 2,020 fewer properties.
Wellington has the lowest number of weeks’ inventory with 8 weeks inventory available to prospective purchasers, but this is up on last year’s figure of only 7 weeks. This was followed by Hawke’s Bay with 10 weeks’ inventory and Manawatu/Wanganui with 11 weeks’ inventory available to prospective purchasers.
The West Coast had the highest number of week’s inventory with a significant 191 weeks’ inventory (nearly 16 years!) available to prospective purchasers. This was the result of only a handful of sales in the Greymouth District which has resulted in the build-up of inventory.
The number of homes sold for less than $500,000 across New Zealand fell from 42.9% of the market (1,914 properties) in January 2019 to 33.7% of the market (1,552 properties) in January 2020.
The number of properties sold in the $500,000 to $750,000 bracket increased from 31.3% in January 2019 (1,395 properties) to 33.7% in January 2020 (1,552 properties).
At the top end of the market, the percentage of properties sold for $1 million or more increased from 10.7% (477 properties) in January 2019 to 14.6% (671 properties) in January 2020.