Annual house price growth nears 10 percent, sales hit four-year high, defying predictions of a slump

Latest figures from REINZ show New Zealand's median house price rose 9.2 percent in the year to June 2020.
Latest figures from REINZ show New Zealand's median house price rose 9.2 percent in the year to June 2020. Photo credit: Getty.

Buyers hoping to snap up a bargain in the wake of COVID-19 may be in for a long wait, new real estate figures show.

According to REINZ June figures, the nationwide median house price grew by 9.2 percent over the last 12 months to $639,000, a rise of 3.1 percent from May.

REINZ chief executive Bindi Norwell said demand for property exceeded supply. With many homeowners still receiving the wage subsidy or on a mortgage holiday, latest figures defy predictions of a slump.

"There were a number of predictions that house prices would fall post-COVID, however we're yet to see any evidence of that happening with every region in the country seeing an uplift from the same time last year and 10 out of 16 regions seeing an uplift from May," Norwell said.

Auckland price-tag grows 9.2 percent year-on-year

Auckland's median house price grew by 9.2 percent in the year to June, to $928,000, a 2.6 percent increase from May. Prices increased year-on-year in all districts except Papakura, in which the median house price fell 7.9 percent from $710,000 to $654,000.

"Auckland city was the only area with double-digit increases, with a 17.1 percent rise to $1,147,500: $13,500 off the record set in March this year," Norwell added.

Gisborne achieves highest annual rise

Gisborne had the highest annual increase in median house price, up almost 30 percent year-on-year, to $440,000: an increase of 6 percent from May to June.  Otago and Southland also had strong year-on-year increases, up 21.7 percent and 19.8 percent respectively.

Waikato sets new record price

Property prices in the Waikato achieved a new record, showing a national median price of $615,000 in June, up 17.1 percent year-on-year and 2.5 percent compared to May.

"With an 18.3 percentage point uplift in sales over the $500,000 mark when compared to the same time last year, and a strong level of increase from Auckland buyers, it's little surprise that median prices [in Waikato] have seen such a rise,” Norwell said.

Sales and listings reach four-year highs  

In June, there were 6625 properties sold, reportedly the highest number sold for the month in the last four years. Compared to June 2019, sales were up 7.1 percent.

Property listings were up 19.7 percent, also the highest number for June in four years.

In Auckland, 2054 properties sold, a year-on-year increase of 9.4 percent. This was also the highest number sold in June for four years. 

The influx of Kiwis returning home could be a reason for an uplift in sales, but Norwell is careful to add that it's still too early to say whether the numbers will continue to rise.

"This may be a post-lockdown peak in activity levels. There are concerns that with the wage subsidies, mortgage holidays ending and an election in September, that there may be a potential trough in activity levels in the coming months.” 

Properties take slightly longer to sell

The median number of days it took to sell a house nationwide was 45, an increase of 4 days compared to June 2019.

In Auckland, the number of days to sell was 55, a year-on-year increase of 9 days.

Although slightly above June 2019, the number of days properties took to sell was lower than in May. 

In the Tasman, properties took the lowest number of days to sell, at 28 days. Properties in the West Coast took the longest time to sell, at 96 days.

Auction sales increase year-on-year 

In June, 733 properties were sold by auction, representing 11.1 percent of sales.  The number of sales by auction was up 10 percent compared to June 2019.

Inventory reaches all-time low 

'Inventory' figures, which measure the total number of listings (new and old), indicate an overall shortage of new listings.

Nationwide inventory levels fell 11.7 percent year-on-year, to 20,772 properties available for sale. This was reported to be the lowest level of inventory for June since records began.

The REINZ House Price Index (HPI), which measures changing value of property in the market, rose 8.6 percent nationwide on the year earlier.  Auckland's HPI rose 7.7 percent.  

REINZ median house prices as at June 2020.
REINZ median house prices as at June 2020. Photo credit: Supplied/REINZ.