September Stats: Property Shows ‘real Resilience’
“Despite a big part of the country being in lockdown and interest rate rises imminent, September produced some great numbers for real estate in the regions,” says Tim Kearins, Owner of Century 21 New Zealand.
Tim Kearins, Owner of Century 21 New Zealand
His comments follow REINZ releasing its Monthly Property Report for September – a month which saw median house prices across New Zealand increase by 15.4% to $795,000 compared to same time last year.
“Strong demand for housing continues despite New Zealand facing its biggest challenges around Covid-19 to date. It just proves the real resilience of the market and Kiwis’ strong and ongoing belief that residential property remains a great place to invest,” says Mr Kearins.
Century 21 offices south of Auckland, he says, continue to report strong buyer interest and great sale prices under Level 2.
With Auckland in Level 4 and Level 3 lockdowns throughout the whole of September, activity was naturally down but the region continues to do relatively well with pockets of price growth reported.
“Century 21’s salespeople have enjoyed phenomenal success despite the Level 3 and 4 lockdowns. They have never stopped working and delivering results for buyers and sellers alike, despite the obvious restrictions and challenges,” he says.
With REINZ headlining ‘Lockdown curtails Auckland activity, the rest of New Zealand begins to see spring lift, seven out of 16 regions reached new record median prices. Auckland’s median price in September was up 20.4% to $1,150,000 compared to 12 months ago, but down 4.2% from its record $1,200,000 in August 2021
The shortage of houses available for sale continues, with September showing more low levels of inventory, but the numbers of listings in the regions are rising.
On 6 October, the Reserve Bank lifted the Official Cash Rate by 25 basis-points to 0.50% - the first OCR hike by the central bank in over seven years. Nonetheless, bank rates still remain low.
Mr Kearins says despite banks factoring in an OCR increase back in September and buyers increasingly aware that rate rises were imminent, the real estate market soldiered on.
“These numbers show that as long as servicing a mortgage remains comparable, or even cheaper than paying rent, prospective buyers will not be put off.
“As well as an ongoing housing shortage, another contributing factor to the strength of the market is the painful alternative of renting. Let’s not forget New Zealand is one of the most expensive places to rent when you compare the proportion of tenants’ rent with other monthly outgoings,” he says.
Tim Kearins says young Kiwis who can pull together a deposit, show their lenders good serviceability, and then manage to purchase their first home will never regret their decision. Property ownership has proven to add to people’s security and quality of life.