The median house price in New Zealand hit a 53 month high of $640,000 in February, says the Real Estate Institute of New Zealand, with seven regions setting new records.
Auckland’s median house price of $888,000, up 4.3 percent from February last year, was the highest in nearly three years. That was driven by an over 64 percent leap over January sales of homes over $1 million. There were 775 sales, 270 or 53 percent more than in February last year, according to Real Estate Institute of New Zealand figures.
In central Auckland, there were 53 sales over $2 million – a significant jump on the 16 a year ago and only 11 in February two years ago.
North Shore $3 million sales jumped to 14, and there were 24 $2 million-plus sales, a dramatic jump after two years of only one or two February sales in that upper bracket. REINZ says that North Shore city saw a record median price of $1,155,000, while Waitakere City had a record equal median price of $830,000.
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But that price rise was driven by a drop in house sales in the most affordable price bracket. The volume of houses selling for under $500,000 dropped from 129 in Auckland two years ago, to only 111 this February.
Mid market sales were up across the city too, with sales between $500,000 and $1 million topping 1082, over 304 up on this time last year.
REINZ Chief Executive Bindi Norwell expects that strong demand across the country will drive a continued price rise in March.
“We will obviously be keeping a close eye on any impacts on the housing market as a result of COVID-19 and it will be interesting to see what decision the Reserve Bank makes on 25 March in terms of the OCR,” she says.
Across New Zealand, the number of properties sold increased by 9.2% from February last year (from 6,132 to 6,694), the highest February sales in four years.
But new listings still remaining critically low – the less than 11,000 new listings are well down on typical 18,000 expected for February, and the second lowest since records began.
The shortage of supply has driven frantic action in the auction rooms and driven down days to sell, as buyers jostle for limited supply.
Auctions in Auckland took off again, with 32.4% (637 properties) sold under the hammer, more than double 298 properties that sold at auction last February 2019. Norwell says this is the highest percentage of auctions for Auckland in 27 months.
“Following a busy January, auction rooms continued to be busy throughout February reflecting that increasing level of confidence we’ve seen for a few months now. This was also reflected in strong clearance rates,” concludes Norwell.
Nationally, days to sell dropped from 47 to 35 compared to February 2019, the fastest February selling time since 2003.
Auckland’s newly heated market drove a 17 day drop in the time to sell to 39 days, the fastest February selling time since the peak of the market four years ago.
Even in slow turnover spots like Northland and West Coast, selling days dropped, while fastest turnover region Taranaki saw median time to sell of only 30 days.
That leaves inventory of houses for sale at only 20,875 down nearly 6000 properties on last year, and the lowest February level ever, albeit slightly up on January’s number of listings.
Westpac senior economist Michael Gordon blames the low level of new listings in February for this “oddly lacklustre" market upswing.
“It’s notable that the surge in prices has yet to bring more sellers out of the woodwork.”
Like Norwell, he says February market figures won’t show the effects of the Covid-19 pandemic, but the bank economists expect house price gains will come to a halt in the near term, as caution among buyers outweighs any further drop in mortgage rates.
“However, we would also emphasise that this shock is temporary in nature, and once the outbreak has passed we would expect the housing market to return to its previous trajectory,” he says.
