Soaring housing prices come under the political spotlight

House prices are one of the most talked-about topics at the moment. And the latest data will add fuel to the fire with the red-hot market showing no signs of slowing down. 

The national average asking price is now $797,156, up 17.1% on November last year according to realestate.co.nz.  And the Real Estate Institute of New Zealand (REINZ) reported a 29.6% year-on-year increase in residential sales last month across the country. 

Here are the latest highlights from New Zealand’s booming property market. 

Listings

New listings were up according to realestate.co.nz. Nationwide, listings increased by 14.5% on the same period last year. 

Auckland was a standout (+45.9%) followed by Gisborne (+37.9%) and Coromandel (+22.1%). Although nationwide the trend was up, some of the regions saw a decrease in new listings, including Nelson & Bays (-23.8%) and Gisborne (-19.9%).   

Housing stock 

Nationwide, stock shortages have continued to make things difficult for Kiwi buyers. 

REINZ reported that inventory levels are at their lowest point ever for eight regions. Those regions worst affected include Nelson (-44.7%) and Marlborough (-42.9%).  By contrast, Canterbury (+13.1%) and Nelson (+9.8%) saw an increase in inventory. 

Volumes

According to REINZ, house sales nationwide increased year-on-year by 29.6% across New Zealand – the highest figure for 13 years. 

However, performance across the regions varied. The West Coast (+74.4%), followed by Auckland (+53.9%) topped the league. Regions seeing a decrease in annual sales compared to this time last year included Marlborough (-5.3%) and (Gisborne -4.3%).  

Values 

According to realestate.co.nz, average asking prices in November hit all-time average highs. Several regions broke all the records, including Auckland, Waikato, Hawke’s Bay, Southland, Coromandel, and Wairarapa. 

It’s a similar story with REINZ’s data. Nationwide median house prices increased by 18.5% to a record of $749,000. Across the regions, top performers included Tasman (+28.0%), Manawatu/Whanganui (+25.8%), and Southland (+23.6%). 

Days to sell

Potential buyers needed to act quickly in November. Nationwide, the median number of days to sell decreased four days to 29. REINZ reported that for 11 regions, the median number of days to sell was less than 30. 

Auctions

Auctions continued to be popular according to REINZ and accounted for 26.9% of sales in November – up from October’s figure of 22.8%. 

Where to next? 

Designed to tackle investor activity in the market, the Reserve Bank’s reintroduction of LVRs from March will have some impact. ANZ has already announced it’s raising the ante for investors by requiring a 40% minimum deposit. 

However, low-interest rates and ongoing supply and demand issues will continue to fuel the property fire.  

Stats NZ recently reported that home ownership rates are at their lowest for 70 years. Rising house prices are undoubtedly putting the Kiwi dream of home ownership out of reach for many, making it a hot political issue.   

Can the soaring property market continue into the New Year? Watch this space to see 2021 brings.