House prices continue to rise post lockdown

by Roxanne Libatique16 Jul 2020

The housing market has continued to recover after the COVID-19 lockdown, with nationwide house prices surpassing economists' predictions for how they would perform amid the pandemic.

The latest data from the Real Estate Institute of New Zealand (REINZ) revealed that median house prices nationwide increased by 9.2% in June 2020 to $639,000 – up from $585,000 in June 2019 and $620,000 in May 2020.

Waikato stole the limelight last month by having a record median price of $615,000 compared to the previous record of $600,000 – marking two consecutive months of record median prices.

Meanwhile, Auckland's median house prices increased by 9.2% to $928,000 in June compared to only $850,000 at the same time last year and $904,500 in May 2020 – making it the second-highest median price on record for the region.

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“Earlier this year, there were a number of predictions that house prices would fall post-COVID. However, we are yet to see any evidence of that happening with every region in the country seeing uplift from the same time last year and 10 out of 16 regions seeing uplift from May,” said Bindi Norwell, the chief executive of REINZ.

“With wage subsidies and mortgage ‘holidays’ still firmly in place, and demand for good property exceeding supply, we wouldn't be so bold as to say there won't be an easing of pricing in the coming months when these support mechanisms come to an end,” she continued.

“But right now, Kiwis' love affair with property continues unabated – especially with the low-interest rates we currently have in the market.”

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Derryn Mayne, the owner of Century 21 New Zealand, said the industry remains cautious as the six-month mortgage holidays and the second round of wage subsidies will end soon.

“Overall, it remains well up on last year and comfortably up on the previous month. Any pundits preaching doom and gloom back in March and April are still miles off being proven right,” she said.

“There is a still a lot to play out … If I were contemplating selling my property, I wouldn't be waiting for spring or summer; I'd be going now with all the market fundamentals in great shape.”

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