Rising property prices 'defy expectations'

Photo: Getty Images
Photo: Getty Images
Canterbury's median property sale prices increased in July compared to the same period last year, while the national median was also up 3.4 per cent, the Real Estate Institute says.

The median sale price in Canterbury for July 2020 rose by 6.7 per cent to $476,000, compared to July last year. Nationally prices rose from $638,000 to $660,000. 

Annually, national median prices rose 15 per cent from $575,000 last July to $660,000 last month.

Sales volumes rose 24 per cent from 6303 to 7854, which REINZ said was the highest in a July month for five years.

For New Zealand, excluding Auckland, the number of properties sold increased by 21.5 per cent from 4328 to 5258 from last July to last month. 

All regions except Gisborne and Marlborough had year-on-year double-digit percentage sales volumes increases.

When Auckland's three-day alert level 3 was announced this week, REINZ said auctions could only now be online. Open homes are barred and instead, private by-appointment viewings must only be held. People could still move house but agents should only carry out appraisals and listings remotely where possible.

Exactly how Auckland property deals will be affected during the three days of level 3 won't be known until REINZ releases its August sales spreadsheets around mid-September.

Kiwibank reacted fast this morning: "The housing market looks to be back on track. But is it about to be derailed again?

"The return of community transmission of Covid-19 adds uncertainty to the housing market outlook.

"Despite the developments of recent days, we were already forecasting house price falls by the end of the year.

"Population growth is evaporating from closed borders and the labour market will deteriorate."

On Friday, REINZ chief executive Bindi Norwell said:  "Even though anecdotally we've had a great start to August, the real question now is how long this can be sustained for, particularly now Auckland has gone back into alert level 3."

"New Zealand’s property market continued to defy expectations in July with sales volumes increasing by 24.6% when compared to the same time last year." 

She attributed recent activity to the weeks of lockdown from late March.

"Part of the sales volumes can be attributed to post-Covid pent-up demand but underpinning this activity during July was strong levels of interest and engagement from all buyer levels including first home buyers, investors and families looking to upgrade," she said. 

"Economist and property experts across the country will be keeping an even closer eye on the housing market now we’ve moved back up the alert level system,” she said.

"If the same pattern occurs as did during the last lockdown, we would expect to see prices hold again post lockdown – although time will tell."

The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 9.4 per cent year-on-year.

The median number of days to sell a property nationally decreased seven days from 41 to 34, the lowest for the month of July in four years. 

Auctions were used in 13.8 per cent of national sales.

They are most used in Gisborne, followed by Auckland, where 26 per cent of sales, or 697, were sold via that method last month. 

- Additional reporting NZ Herald




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