The home-buying frenzy has spread beyond Auckland and is sweeping the country: REINZ's latest report reveals a string of surprises

Monthly sales reach a 42-month high

Usually, around a month before a general election, people adopt a wait-and-see approach and property sales decline.

However, everything about 2020 seems unusual. In September, residential property sales across New Zealand rose 37.1% compared with the same period last year, from 6,112 to 8,377 homes. This was the highest monthly national sales total in 42 months, since March 2017, and the strongest September in 14 years.

• In Auckland, sales rose 2% year on year, from 1,867 to 2,861 homes. This was the highest volume in 52 months and the largest annual increase in 11 years.
• Across New Zealand excluding Auckland, sales rose 9% year on year, from 4,245 to 5,516 homes, making it the busiest September in 14 years.

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Even more noteworthy than Auckland's sharp sales growth was the fact that almost no region nationwide recorded a year-on-year decline.

Only Gisborne's sales were broadly unchanged from September last year.

REINZ chief executive Bindi Norwell acknowledged: “Sales increases across the country have far exceeded expectations. Annual sales growth topped 20% in 13 regions, and exceeded 30% in 10 regions. We have not seen sales growth of this magnitude across so many regions since April 2015.”

Furthermore, “At present, there is no sign that this trend will change over the coming months.”

Median house prices set new records in 9 regions

Sales volumes were not the only figures to rise sharply in September; house prices also surged. “Median house prices reached record highs in more than half the country's regions and in 19 cities and districts within them.

Only two regions failed to achieve double-digit growth, reflecting the exceptional strength of the market overall,” Norwell said.

New Zealand's national median house price rose 14.7% from NZ$596,956 in September 2019 to a record NZ$685,000 in September 2020. It was also up 1.5% from NZ$675,000 in August this year.

• In Auckland, the median house price rose 6% from NZ$848,000 a year earlier to a record NZ$955,000. It was also 0.6% higher than the NZ$949,500 recorded in August this year.
• Across New Zealand excluding Auckland, the median house price rose 0% from NZ$500,000 in September last year to a record NZ$585,000. It was also up 0.7% from NZ$570,000 in August this year.

In September, median prices reached record highs in 9 regions. Besides Auckland, these were Gisborne, Taranaki, Otago, Bay of Plenty, Manawatu/Wanganui, Wellington, Waikato and Canterbury.

Norwell said the figures showed that price rises were now sweeping across most of the country. She attributed this to the following: “Extremely low interest rates are drawing large numbers of investors into the market, where they are competing with first-home buyers for properties and pushing prices higher. This means that, even with LVR restrictions removed, buying a home is becoming harder and the barriers to entry for first-home buyers are rising.”

“Even the most bullish market analysts did not foresee such rampant price rises. But with no increase in the total number of properties available for sale, prices currently look set to keep rising until Christmas.”

REINZ House Price Index (HPI) reaches another record high

New Zealand's REINZ House Price Index, which measures changes in residential property values, rose 11.1% year on year to a new high of 3,145. This was also the first time the index had passed the 3,100-point mark.

• Auckland's HPI rose 4% year on year to a record 3,194.
• Across New Zealand excluding Auckland, the HPI rose 9% to another record high of 3,105.

National figures over 3 months showed an increase of 6.2% despite the impact of COVID-19, the largest rise in 201 months.

Time to sell falls to record lows

In September, the national median time to sell fell from 36 days in September 2019 to 32 days. This was the lowest figure for September in 4 years, and the shortest selling time since COVID-19 first broke out in New Zealand in March 2020, when the median was 30 days.

• Auckland's median time to sell was 36 days, down 3 days year on year and the lowest figure for September in 4 years.
• Across New Zealand excluding Auckland, the median time to sell fell from 34 to 29 days, a year-on-year reduction of 5 days and the lowest figure for September in 15 years.

 This trend was also nationwide. In September, around half the country's regions had a median selling time below 30 days, closely resembling the situation in March.

“This suggests that people's fear of missing out on the opportunity to buy is intensifying, while market confidence is high. Many auctions are being brought forward because of strong indications of bidding interest, shortening the time needed to sell,” Norwell said.

Auctions account for a growing share of home sales

In September, auctions accounted for 16.5% of all sales nationwide, with 1,381 homes sold under the hammer. This compared with 13.1%, or just 802 homes, a year earlier, and 15.9% in August this year. It was the highest auction share for September in 4 years. 

Gisborne had the country's highest auction share at 74.4% (29 homes), compared with just 30.8% (12 homes) a year earlier. Auckland ranked second at 27.9% (799 homes), up from 25.9% (483 homes) a year earlier.

Property inventory continues to fall

The total number of properties available for sale nationwide fell 17.0% year on year, from 21,174 in September 2019 to 17,576 in September this year, the lowest total inventory on record.

No region recorded an annual increase in inventory in September, while 8 regions reached record lows.

Measured in weeks of inventory, Wellington was once again the lowest, with just six weeks of housing stock for prospective buyers to choose from, two weeks less than last year.

Properties below $500,000 become scarce

Across New Zealand, the share of homes sold for less than NZ$500,000 fell from 36.3% (2,221 homes) in September 2019 to 24.9% (2,088 homes) in September 2020. This was the first time on record that more than 75% of homes had sold for over NZ$500,000.

Correspondingly, the share of homes selling for NZ$1,000,000 or more rose from 14.0% (854 homes) in September 2019 to 22.2% (1,860 homes) in September 2020, the highest share of high-end sales recorded for September.