Houses Prices Incredibly Strong But Jets Starting To Cool
“Overall, house prices are still well up on 12 months ago, yet we’re now seeing month-to-month growth becoming more sustainable,” says Tim Kearins, Owner of Century 21 New Zealand.
His comments follow REINZ releasing its Monthly Property Report for July which confirmed New Zealand’s real estate market remains incredibly strong for the middle of winter.
July saw median house prices across New Zealand increase by 25.2% to a record $826,000 in 12 months. Notably, however, the overall nationwide monthly increase was up by just 1.3% compared to June.
With REINZ headlining ‘New Zealand reaches new record median house price; rate of growth shows signs of easing’, two out of 16 regions reached new record median prices, including Auckland up 28.0% in 12 months to $1,175,000. Two other regions equalled their records.
Nationwide, July saw an easing in the number of properties sold across New Zealand, with an 11.7% decrease compared to 12 months ago – although still strong for a winter month. At the same time, the median number of days to sell decreased from 34 to 31 when compared to July 2020 - the lowest for a July month since 2016.
REINZ’s July report again confirmed a dire shortage of houses available for sale. The total number of properties available for sale decreased by 34.8% compared to July 2020. This is the lowest level of inventory ever seen in New Zealand.
The Century 21 leader says very few listings remains a significant problem for buyers and the real estate industry alike. However, a lack of competing properties on the market remains a key driver in achieving strong sale prices.
“If I was contemplating selling, I’d be listing now before the spring rush when we traditionally see a lot more properties go on the market. The fact there are so few competing listings, but still unrelenting demand, represents a really good time to list and be noticed.
“What’s more, with speculation that the Official Cash Rate could start increasing from next week, now’s also a great time to buy and lock in a rock-bottom interest rate,” says Mr Kearins.
The new owner of Century 21 New Zealand, Mr Kearins owns the long-time Century 21 Premier franchise based at 10 The Square in Palmerston North.
“Like a lot of provincial centres, we’ve seen some phenomenal price growth in the past 18 months which is starting to level off. For instance, in April the Manawatu/Wanganui median sale price was up a staggering 46.8% on the previous 12 months. That kind of annual growth is now not as large.
“While Palmerston North City and the Manawatu District may have reached new heights in July, the wider Manawatu/Wanganui regional record median price didn’t change in the past month – representative of what we’re now seeing up and down the country.
“While huge price rises have been great for many, they’re just not sustainable. I’m pleased for the likes of first-home buyers, we’re now starting to see the jets cooling a little,” says Tim Kearins.