House prices skyrocket to new high, most properties sold since 2007 - REINZ

As the national median house price skyrocketed to a record high in November, new data shows more residential properties were sold than in any month since before the Global Financial Crisis. 

According to the Real Estate Institute of New Zealand (REINZ), 9885 residential properties were sold last month, up a massive 29.6 percent from November 2019. That's the highest number of properties sold since March 2007 and the most November sales since 2006.

The median national house price jumped to a new high of $749,000, an increase of 18.5 percent from $632,000 a year ago. It's also up $24,000 since October. 

House prices skyrocket to new high, most properties sold since 2007 - REINZ
Photo credit: REINZ.

Property sales

The national boom in sales was buoyed by large increases in the regions. 

The West Coast witnessed the largest percentage increase in annual sale volumes in November, up a colossal 74.4 percent with 75 houses sold. That's the highest number for the region since 2004.

Northland's sales jumped by 36.1 percent, Canterbury was up 31.7 percent and Bay of Plenty increased 29.5 percent. Just Marlborough, Gisborne and Hawke's Bay saw annual decreases in sale volumes. 

With 3728 properties sold, Auckland saw its most monthly sales since March 2007 and the most for the month of November ever. Sales were up 53.9 percent on November last year, the third month in a row where the number of houses sold in the City of Sails has been up by more than 50 percent year-on-year.

REINZ chief executive Bindi Norwell described November as "incredible". 

"November saw more than half (10 out of 16) of the regions across the country with double-digit percentage increases in annual sales volumes showing how buoyant the market is," she said.

"Part of this is likely to be attributed to people wanting to purchase property ahead of Christmas, partly due to the Reserve Bank announcing in early November that it would undertake a consultation in December to re-introduce LVRs earlier than planned, but also due to this underlying fear that prices might increase even further in the coming months."

The median number of days to sell a property nationally decreased by four days to 29. That's the lowest also since March 2007. Taranaki and Southland had the lowest of all the regions at 21 days.

House prices skyrocket to new high, most properties sold since 2007 - REINZ
Photo credit: REINZ.

Median prices

Overall, 11 regions hit record median prices in November, including Auckland which jumped 16.4 percent from $885,000 in November last year to $1,030,000. It's also an increase of $30,000 since October. 

Other regions to see record prices include Tasman - which had a 28 percent year-on-year increase to a median price of $774,400 - Southland, and Taranaki. Manawatu/Wanganui surpassed $500,000 for the first time with its fifth record median price in a row. Waikato hit $670,000, the seventh month in a row the region hit a record high.

Norwell said the high prices shows "just how confident the market is at the moment". 

"The last time we saw these sorts of records was back in October 2003 when the market was seeing significant increases in house prices," she said.

"We also saw 30 Districts around the country with record median prices - four of them in Waikato, four in Wellington and three in Auckland, Manawatu-Wanganui, Hawke's Bay and Taranaki. This is the highest number of records we've seen at a District level since February 1992 – just one month after REINZ started collecting monthly data from across the country."

Norwell said there has been successive annual increases in median house prices since October 2011 and that the last five months have seen double-digit increases.

"This just isn't sustainable and with data out earlier this week showing that home ownership is at its lowest level in 70 years, the gap between those that own and those that rent is just going to keep growing unless we can do something to start addressing the supply issue the country has."

Norwell is referencing StatsNZ's Housing in Aotearoa report which found homeownership was at its lowest rate since 1951. Ownership has fallen for all age groups since the early 1990s.

For example, in 1991, 61 percent of those aged between 25 and 29 lived in an owner-occupied home. But this had dropped to 44 percent by 2018. For those in their 30s, the rate dropped from 79 percent to 59 percent. 

REINZ's inventory data shows that the number of properties available for sale nationally has decreased 16.9 percent since last year to 18,319. Eight regions, including Bay of Plenty, Waikato, and the West Coast, had their lowest levels ever. 

"Hopefully we'll hear more news from the Government in the coming months around their plans to reform the RMA and address some of the speed and cost issues developers and builders face when it comes to building residential property," Norwell said.

"Unless we can build at scale and in an affordable manner, unaffordability is going to be something that remains a significant issue for Kiwis looking to get into the property market."