Are overseas buyers behind Auckland’s soaring house prices again? This time, Chinese buyers are not taking the blame

Real-time data from realestate.co.nz shows that average asking prices reached new highs in another six regions in October, with sellers’ market expectations remaining buoyant. Nationwide, the average asking price rose 12.4% year on year to NZ$772,288. 

Auckland topped the rankings in October, with an average asking price of NZ$1,015,38. It also recorded the largest increase in new listings of any regional property market nationwide, at 36.8%.

realestate.co.nz spokesperson Vanessa Taylor said: “The Auckland market has recently attracted considerable attention from overseas buyers, which could push up house prices and encourage owners to sell.” 

New listings increased in several regions nationwide in October, indicating that sellers across the country were very active in October. However, compared with the same month in 2019, total housing stock nationwide was still down 18.7% in October this year.  

However, Vanessa said low stock levels were a long-term trend in New Zealand’s residential market, and the year-on-year increase in new listings in 9 of the 19 regions was good news for buyers.

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All six regions with record average asking prices are in the North Island

Many North Island sellers had reason to celebrate in October. Real-time data from realestate.co.nz shows that Auckland, Waikato, Bay of Plenty, Hawke’s Bay, Wairarapa and Manawatū/Whanganui all recorded their highest asking prices for October in 13 years. 

In fact, average asking prices rose year on year in almost every region nationwide in October. The sole exception was Central Otago/Lakes, where prices fell 3.4%. However, price fluctuations are normal there because of the relatively large number of estate properties for sale. Vanessa said record prices were always good news for sellers: “With housing stock falling both nationally and regionally, this price trend indicates that demand exceeds supply.”

The housing shortage shows no sign of easing

The long-term decline in housing stock continued in October, with only 18,141 homes for sale nationwide, down 18.7% on the same time last year. 

Regions where housing stock reached record lows last month included Northland (down 36.0% to 857 homes), Waikato (down 24.9% to 1,220), Bay of Plenty (down 30.1% to 979), Southland (down 10.7% to 292), Coromandel (down 37.0% to 295) and Marlborough (down 40.5% to 160). 

Vanessa said that looking back over 13 years of data, New Zealand’s housing shortage showed no sign of easing. With increasing numbers of New Zealanders returning home, the impact on housing stock levels would be particularly worth watching.

“With the spread of COVID-19, record numbers of New Zealanders have returned home and stayed to settle. This can be expected to have a considerable impact on the total number of homes available for sale nationwide.” Vanessa said international traffic to realestate.co.nz had continued to grow since April, suggesting people were already searching for properties before returning home. 

“Interestingly, many real estate agents around the country report that New Zealanders are buying properties directly from overseas or while in isolation, without even viewing them in person,” Vanessa said.

Active sellers offer more choice

Despite declining total stock levels, many sellers and real estate agents were very busy in October. Nationwide, new listings last month rose 13.8% year on year, with 11,649 properties newly listed.

Auckland, the West Coast, Otago and Gisborne were the most active markets, with new listings increasing by 36.8%, 22.4%, 18.9% and 18.8% respectively.

Vanessa said prospective buyers could take encouragement from having more new listings to choose from in October 2020 than at the same time last year. She believed continued growth in new listings could affect asking prices in these regions.

The number of sellers in the market usually increases over the summer months, with a slight dip during the busy Christmas period. “The nationwide lockdown earlier this year had a major impact on the market. Combined with the changes COVID-19 has brought to many New Zealanders’ lives, this points to a surge in new listings over summer.”

Prospective buyers from Britain and Australia outnumber New Zealanders

Auckland’s average asking price broke through the million-dollar mark for the first time in September this year. Growth remained strong in October, with the average asking price edging up 1.2% on the previous month and rising 8.4% year on year to NZ$1,015,383.

International traffic to realestate.co.nz has been rising since April. A survey of international visitors to realestate.co.nz, conducted from 23 July 2020 through to the 29, found that among respondents visiting from overseas to look for property in New Zealand, 45.9% identified as an Overseas Resident and 49.4% as a New Zealand Citizen/Permanent Resident. A further 4.8% identified as “other” and were not surveyed further.

Most of these overseas buyers were reportedly interested in Auckland, which Vanessa believed could be pushing up house prices in the region.

“New Zealand has long been seen as a safe haven in a crisis. Website traffic data shows that overseas buyer interest surges when there is positive COVID-19 news in New Zealand, meaning no new cases, and eases when there is negative COVID-19 news,” Vanessa said.

User data from realestate.co.nz shows that last month, apart from users based in Auckland itself, more people from England and New South Wales viewed Auckland listings than users from other parts of New Zealand.

Vanessa said: “It seems quite a few Australians and Britons are keeping an eye on Auckland’s property market.”