Record-low housing stock, sky-high asking prices as COVID-19 pandemic impacts market

The effects of the COVID-19 pandemic are being felt in the housing market, with new data showing the number of houses available for sale hit a 13-year-low in August.

According to, nationally, the total homes available for sale in August dropped 13.2 percent on the same time last year. The 17,974 listings was also down 7.6 percent on July, with nine of 19 regions hitting 13-year lows.

The largest stock decrease was in Taranaki, which had just 284 homes available to buyers last month, down 47.9 percent on August 2019. As the supply dwindles, the average asking price in the region is increasing, up 2.1 percent on July to $510,016.

"Our national housing shortage is not getting better and with all-time stock lows in nearly half of our regions, buyers across the country had less choice than ever last month," said spokesperson Vanessa Taylor.

She said New Zealand's fast-growing population coupled with an increase in the number of Kiwis returning home due to COVID-19 was likely increasing the demand for property.

"With many Kiwis unable or reluctant to relocate overseas right now, this too is likely putting a strain on the market."

However, Central Otago/Lakes saw stock rise by 18 percent year-on-year. The only other regions to see increases in total homes available for sale were the Hawke's Bay and Southland.

Record-low housing stock, sky-high asking prices as COVID-19 pandemic impacts market
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The national average asking price increased to $824,702 in August - up 21.7 percent on the same time last year or 9.1 percent on July. Aside from April - when lockdown skewed the data - this is the first time the national average asking price has tipped over $800,000.

"Up until April's spike, the national average asking price has been sitting in the low to mid $700,000s throughout 2020 so it is significant to see an almost $70,000 increase in August 2020 compared to July 2020," said Taylor.

She said there were several reasons for the increase in asking prices.

"I suspect that low-interest rates and the removal of LVR restrictions earlier this year are enabling more people to enter the property market. Plus, many Kiwis are still returning home because of COVID-19 so I don't think there is a shortage of buyers in New Zealand right now," she said.

"As we have seen in the cramped rental market, everyone needs somewhere to live. Given our country's long-term housing shortage, I expect demand will remain high with both owner-occupiers and investors looking to achieve their property goals."

There were all-time highs in several regions, such as Taranaki, Northland ($715,777, up 2.9 percent on July), Bay of Plenty ($769,285, up 4.8 percent), and central North Island ($604,349, up 17.7 percent).

Record-low housing stock, sky-high asking prices as COVID-19 pandemic impacts market
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Central North Island was also up 20.2 percent on August last year, with Taylor pointing out that the number of homes available for sale in the region was at an all-time low for the second consecutive month.

"When supply decreases, we tend to see prices increase and I suspect that, despite a 4.3 percent year on year increase in new listings in the region, this is the case in Central North Island."

Data from shows that Taumaranui, Ohakune, Turangi, Kinloch, and Taupo were the most searched in the region during August.

There was no "winter slump" this year in new listings. In August, new listings were up 16 percent on August last year.

"It could be that the lockdown in April, when vendors were unable to list their homes, has caused a backlog of properties around the country. But it might also be the result of people's changing circumstances," said Taylor.

"COVID-19 has changed the way a lot of people work. I wouldn't be surprised if Kiwis want more from their homes and if where they want to live is changing as remote working becomes more widespread."

Wairarapa saw the biggest increase in new listings, up 91.2 percent to 130, followed by Southland, up 44.5 percent to 198, and Nelson and Bays, up 43.7 percent to 194.

"These three regions have been particularly tight on new listings during much of 2019 and 2020, so it is good to see vendors coming to market in these areas," said Taylor.