The country’s housing market remained red-hot in January, with the Real Estate Institute of New Zealand (REINZ) reporting year-on-year increases in median home prices.
According to REINZ, median house prices across New Zealand increased by 19.3% year-on-year, from $612,000 in January 2020 to $730,300 in January 2021.
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Additionally, REINZ figures showed four regions setting record median prices: Bay of Plenty, with a 13.1% increase from $680,000 in January 2020 to $769,000 in January 2021; Hawke’s Bay: with a 25.9% increase from $550,000 in January 2020 to $692,500 in January 2021; Taranaki, with a 23.8% increase from $420,000 in January 2020 to $520,000 in January 2021; and Nelson, with a 19.2% increase from $597,500 in January 2020 to $712,500 in January 2021.
Meanwhile, the median house price in Auckland increased by 14.9% from $870,000 at the same time last year to $1,000,000.
“Usually, in January the residential property market slows down, and prices ease off a bit as people head to the beach for their summer holidays,” said Bindi Norwell, chief executive at REINZ.
“However, the first month of 2021 was anything but normal, as house prices across the country have continued to rise, with January seeing four regions reach new record median prices and one region equal its December record. Furthermore, 27 districts around the country reached new record high median prices, with 13 of those districts exceeding last month’s record.”
REINZ also reported that the number of residential properties sold in January across New Zealand increased by 3.2% year-on-year (from 4,802 in January 2020 to 4,957 in January 2021) – the highest for the month of January in five years.
And in Auckland, the number of properties sold in January increased by 37.6% year-on-year (from 1,359 to 1,870) – the highest for the month of January in 14 years.
“Real estate was on fire in January,” said Derryn Mayne, owner of Century 21 New Zealand. “In fact, it may well prove a cracker month for 2021 given February’s snap lockdown in Auckland and loan-to-value ratios kicking back in from March.”
The housing expert warned, however, that the latest lockdowns and the reintroduction of LVRs may impact February’s transaction numbers somewhat.
“Summer has been incredibly strong, but some key factors are changing which will have an impact,” said Mayne. “Loan-to-value ratios will be reinstated on March 01, meaning a 20% deposit requirement for owner-occupiers and 30% for property investors. What’s more, later in March the mortgage holiday scheme ends which will inevitably see a rise in exit and mortgagee sales.”
“Without doubt, there’ll soon be fewer eligible buyers and possibly more stock for sale,” said Mayne. “In the meantime, many first-home buyers and investors are desperate to secure a property before the rules start changing next month. In fact, right now could prove the best time to sell.”