REINZ July Data: New Zealand Reaches New Record Median House Price; Rate Of Growth Shows Signs Of Easing
Median prices for residential property across New Zealand increased by 25.2% from $659,500 in July 2020 to a record $826,000 in July 2021, 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.
Two out of 16 regions reached new record median prices, two regions saw equal records and 20 districts reached new record median highs.
The median house price for New Zealand excluding Auckland increased by 23.3% from $557,500 in July last year to a new record of $687,500 in July 2021.
Auckland again underpinned the strength in the New Zealand median, reaching a record median house price in July, up 28.0% from $918,000 in July 2020 to $1,175,000 in July 2021. This growth was reflected throughout the region with 6 out of 7 districts reaching new record median prices – North Shore City ($1,375,000), Rodney District ($1,240,000), Waitakere City ($1,100,000), Manukau City ($1,075,000), Papakura District ($913,000) and Franklin District ($885,000).
In addition to Auckland, 3 other regions reached record median prices. They were:
- Canterbury: with a 24.7% increase from $477,000 in July 2020 to a new record of $595,000 in July 2021. Additionally, Selwyn District ($740,000), Waimakariri District ($620,000), Timaru District ($460,000) and Ashburton District ($458,000) all reached record median highs
- Manawatu/Wanganui: with a 31.8% increase from $440,000 in July 2020 to a record equal of $580,000 in June 2021 – flat from last month. Additionally, Palmerston North City ($678,000), Manawatu District ($629,000), Rangitikei District ($520,000) and Tararua District ($445,000) all reached record median prices
- Southland: with a 16.7% increase from $360,000 in July 2020 to a record equal of $420,000 in July 2021 – the same as last month.
Jen Baird, Chief Executive at REINZ says: “House prices have continued to rise across the country as every region saw a year-on-year increase from July 2020. The last two months have shown early indications that the rate of growth is starting to ease, however, it is too early to say whether this is the usual winter easing we would normally see or if the Government’s intervention in the market and signalled changes to the OCR are starting to take effect.
“The strength of the market has again been reflected in the REINZ House Price Index which reached a new high on the index nationally. Every region across New Zealand reached a record level in July, indicating the underlying value of property is holding strong and will likely do so for a few months yet,” continues Baird.
“Looking at Auckland, we’ve seen another record median price, the ninth record in the last 12 months – this growth is spread across the region with six of the seven districts reaching new record median prices in July,” she continues.
Sales volumes decrease across most of New Zealand
The number of residential properties sold in July across New Zealand decreased by 11.7% when compared to the same time last year (from 8,135 to 7,187). July 2020 was the first full month of real estate market activity post-lockdown and saw an unusually high level of sales. What we see this July is far more aligned to the usual winter sales numbers, albeit in a high demand, supply constrained market.
For New Zealand excluding Auckland, the number of properties sold in July decreased by 17.2% when compared to the same time last year (from 5,427 to 4,496).
In Auckland, the number of properties sold in July decreased by 0.6% year-on-year (from 2,708 to 2,691).
In July, two regions out of 16 saw annual increases in sales volumes. Regions with increases were:
- Northland: +7.8% (from 218 to 235 – 17 more houses) – the highest for a July month since 2016
- Gisborne: +70.6% (from 34 to 58 – 24 more houses) – the highest for a July month since 2016.
Regions with the biggest annual percentage decrease in sales volumes were:
- Nelson: -50.0% (from 124 to 62 – 62 fewer houses) – the lowest for a July month since 2014
- Tasman: -30.5% (from 95 to 66 – 29 fewer houses)
- Hawke’s Bay: -28.4% (from 282 to 202– 80 fewer houses) – the lowest for a July month since 2014.
“July saw an easing in the number of properties sold across New Zealand, with an 11.7% decrease compared to July 2020 – although still showing strong numbers for a winter month with the number of properties sold in July 2021 higher than in 2019, 2018 and 2017. It is important to note that July 2020 was a particularly strong month as the country came out of COVID-19 lockdowns and completed delayed sales, so sales volumes were stronger than an average July,” says Baird.
“With a 5.3% decrease in the number of sales from June 2021, we may be starting to see purchasers being impacted by the return of LVRs and talk of interest rates looking to rise. We need a few more months of data before we can see the impact of these changes and whether or not they are a long-term trend,” continues Baird.
“The availability of property for sale continues to put a constraint on activity in the current market, with a record low level of inventory reported in July and continued strong buyer demand. It is this time of year that people start to prepare their property for the usual increase in spring sales activity. On the ground, there are signs of more listing activity including from people who will take possession of a newly built home – a result of the record levels of consents granted over the last year. Played out, this will hopefully mean that we will start to see stock levels increase soon, delivering more choice into the market,” she continues.
“This should also start to alleviate people’s fear of not finding anything which has seen many vendors hold back from listing their property until they secure something to move into. As we head into the warmer months this fear, and the supply challenges that create it, should ease,” points out Baird.
REINZ HPI shows house values continue upward trend in July
The REINZ House Price Index (HPI) for New Zealand, which measures the changing value of property in the market, again increased 30.6% year-on-year to 3,937 a new high on the index. This was the highest annual percentage increase in the HPI that we’ve seen since records began and is the fourteenth consecutive month that we’ve seen a new high, showing the continued strength of the market.
The HPI for New Zealand excluding Auckland showed house price values increased 32.9% from July 2020 to 3,969 in July 2021, a new high on the index and the highest percentage increase since records began.
Auckland’s house price values increased 27.7% year-on-year to 3,897 a new record high. Every region reached a new high on the REINZ House Price Index in July.
In July, Manawatu/Wanganui again had the highest annual growth rate in house price values with a 48.5% increase to a new record index level of 5,051. In second place was Wellington with a 39.9% increase and in third place was Gisborne/Hawke’s Bay with a 35.1% annual increase in house price values.
The one-month and three-month movements for New Zealand on the REINZ House Price Index have shown a slight easing in the rate of growth, showing early signs of property values stabilising across the country.
Median days to sell lowest for a July month since 2016
In July, the median number of days to sell a property nationally decreased 3 days from 34 to 31 when compared to July 2020, the lowest for a July month since 2016.
For New Zealand excluding Auckland, the median days to sell decreased by 3 days from 33 to 30, the lowest median days to sell for a July month since 2004. Auckland also saw the median number of days to sell a property decrease by 3 days from 35 to 32 – the lowest for a July month since 2016.
Six regions across the country had a median number of days to sell of 30 or less.
Properties in Tasman have sold at the fastest rate of any region in New Zealand, with the median number of days to sell at 25 - the fastest that properties have sold in that region in a July month since 2003. Also of note, was the West Coast which saw properties sell 25 days faster than in July 2020 – at 31 days it was the fastest that properties have sold in the month of July since 1994.
Northland had the highest days to sell of any region in July at 43 days – the only region with median days to sell in excess of 40 days.
Highest percentage of NZ homes sold by auction for a July month since records began
Auction rooms are not seeing the usual winter slowdown, with more than a quarter of all properties sold by auction in July (26.5%) up from 13.5% in July 2020. This is the highest percentage of auctions for a July month since records began.
“Auctions continue to be a popular method of sale across many parts of the country as it provides a good way of finding the value of a property when the market is moving quickly, which has been the case for some time now,” says Baird.
“From a purchaser’s perspective, auctions provide complete transparency in terms of pricing and understanding where other bidders see value,” continues Baird.
New Zealand excluding Auckland saw 18.2% of properties sold by auction, up from 7.3% in July last year - the highest percentage of auctions for a July month since records began.
Gisborne had the highest percentage of auctions across the country with 53.4% of properties selling under the hammer (31) up from 47.1% (16) at the same time last year. This was the highest percentage for a July month since records began.
Auckland had the second highest percentage of auctions in New Zealand with 40.4% (1,086) properties sold by auction in July up from 25.9% in July 2020 (701 properties). July saw the highest percentage of auction sales in a July month since 2016.
Bay of Plenty was in third place with 35.1% (155) properties sold by auction – up from 17.3% (95) in July last year.
Other regions of note were Canterbury with 31.2% (302) properties sold by auction, the highest percentage of auctions for a July month since records began; and Waikato with 21.9% (160) properties sold by auction, the highest percentage of auctions for a July month since records began.
Shortage of houses available for sale continues – lowest level of inventory ever
The total number of properties available for sale in New Zealand decreased by 34.8% in July to 12,684 down from 19,441 in July 2020 – 6,757 fewer properties compared to 12 months ago. This is the lowest level of inventory we’ve ever seen in New Zealand (surpassing the previous record low set in December 2020 with 12,932).
For the fourth month in a row, only one region saw an annual uplift in inventory levels - Gisborne with a 20.0% increase in inventory levels from the same time last year (from 50 to 60 properties – 10 additional properties).
Regions with the largest percentage decrease in total inventory levels were Northland -53.6% (from 1,013 to 470 – 543 fewer properties), Nelson -53.5% (from 357 to 166 – 191 fewer properties), Canterbury -48.6% (from 2,535 to 1,303 – 1,232 fewer properties), West Coast -47.3% (from 260 to 137 – 123 fewer properties) and Bay of Plenty -47.2% (from 1,281 to 676 – 605 fewer houses).
Canterbury, Nelson, Northland, Southland, Taranaki and the West Coast all experienced their lowest levels of inventory in July 2021.
Inventory data comes from realestate.co.nz.
$1m+ properties still holding strong
14.8% (1,063 properties) of homes sold across New Zealand in July 2021 sold for less than $500,000. This is a drop from 28.1% of the market (2,290 properties) in July 2020 and was a minor decrease from June 2021 where 15.8% of properties sold for less than $500,000.
The number of properties sold in the $500,000 to $750,000 bracket fell from 32.7% (2,664 properties) to 27.1% (1,951 properties).
At the top end of the market, the percentage of properties sold for $1 million or more increased from 19.0% (1,547 properties) in July 2020 to 35.0% (2,516 properties) in July 2021 – the highest percentage of $1 million plus properties sold ever.