In: Mortgage Tips

New Zealand’s property market ended 2019 with a bang, the Real Estate Institute’s latest data shows. Here’s what you need to know.

High number of properties sold

REINZ’s December update showed that the number of properties that changed hands in the month was the highest for any December in three years. Nationally, the number of properties sold across New Zealand was up 12.3 per cent from the same time in 2018. In Auckland, turnover was up almost 32 per cent.

Bay of Plenty also experienced strong activity – there were 21.5 per cent more homes sold there in December compared to the same time a year earlier.

“With insufficient properties on the market to satisfy buyer demand, it suggests that buyers are being more definitive when it comes to purchasing as they are aware of the need to move quickly on properties and areas with high demand,” Real Estate Institute chief executive Bindi Norwell said. “This is backed up by the decrease in the median number of days to sell which is at its lowest point for three years.”

Average house prices continue to rise

The national median house price increased by 12.3 per cent in December to $629,000. In Auckland, it was up 3.5 per cent to $890,000. Record median prices were also recorded in Northland, Manawatu/Whanganui, Taranaki, Tasman and Southland.

In December, 15 out of 16 regions had a year-on-year increase in their median house price and five regions hit records.

“Southland, Manawatu/Whanganui and Gisborne again saw really strong uplifts in price, with demand for properties in these regions outstripping supply and adding to the premium people are prepared to pay. There’s also likely to be an element of increasing vendor expectations adding to the price increases as month after month sellers in the region are reading stories of higher property prices,” Norwell said.

“Wellington was also a standout region in December, with four areas seeing new record median prices – Kapiti Coast District ($675,000), Masterton District ($477,000), Porirua City ($775,800) and South Wairarapa District ($625,000) showing the continued strength of the capital city’s property market.

“Looking at the Auckland region, Manukau City hit a new record median high of $900,000 in December, with Rodney District not far behind with a median of $890,000. North Shore City also saw a 7.1 per cent annual uplift in median price, reaching $1,050,000 – the first time the median price has been over the million-dollar mark in four months.”

Lowest level of inventory since records began

The total number of properties available for sale nationally decreased by 24.5 per cent in December to 18,230 down from 24,158 in December 2018 – a decrease of 5928 properties compared to 12 months ago and the lowest level of inventory since records began.

Every region had an annual decline in total inventory levels, with the largest percentage decreases in Taranaki, down 47.3 per cent from 649 to 342, Southland, down 40.6 per cent, Marlborough, down 33.1 per cent and the West Coast, down 29.7%.

Economist Tony Alexander said the lack of housing supply would continue to push up prices, particularly in Auckland where, he said, it was possible 2020 could see house values climb by 10 per cent or more.

Andrew Beattie, an economist at Infometrics, said structural and regulatory changes had been finalised in 2019, which gave buyers more confidence to jump back into the market.

“Persistent and unexpected strength in net migration over the last year is contributing to the housing market’s recovery, aided by declines in mortgage rates throughout 2019.”

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Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.