More properties were sold during August 2020 than any August during the last five years, Real Estate Institute of New Zealand (REINZ) data shows. That’s despite most of the country being in level two lockdown and Auckland being in level three.
Against all odds, the property market continues to run red hot. We’ve taken a closer look at the data and what the experts are saying to help keep you informed.
New Zealand’s average property price increased by 16.4% during August according to the most recent REINZ report. The regions that saw the biggest price increases were:
Rotorua ($510,000), Tauranga ($745,000), Lower Hutt ($663,200), Upper Hutt ($663,200) and several areas throughout Auckland also saw record median prices during the month.
For an insight into why prices are skyrocketing, you only have to look at the way properties are selling right now. In Auckland, the median days to sell this August was just 35, nine days less than the same month last year, and nationally, properties were selling at a median of 33 days, 4 days less than the same month last year.
At the same time, housing stock is at record lows, with 13.2% fewer listings this August than August 2019, according to realestate.co.nz. This indicates that demand is extremely high and that supply is low, forcing buyers to compete with one another to snap up the few properties that are available. Anecdotal reports of auctions being brought forward and queues out the doors of open homes confirm this.
The property market may be going full steam ahead right now, but what’s going to happen next? The performance of the country’s economy could dampen the market, with GDP contracting by 12.2% in the second quarter of this year. Despite that, the Reserve Bank of NZ expects the economy to recover quickly to near pre-COVID levels by mid 2021.
What’s more, many other factors indicate that this hot market is here to stay for the near future:
It’s impossible to predict the property market with certainty and the best time to buy is always when you’re ready. But the signs suggest that now is as good a time as any to buy property in New Zealand, whether you’re looking for an investment or your next home.