2,596 homes snapped up: NZ's 'hottest' July since 2015

While the number of properties sold in July increased by nearly 25 per cent on July last year, the Real Estate Institute of New Zealand is holding off bets on what August will bring

Bindi Norwell, chief executive at REINZ, says: “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 Level 3."

She says that the July figure - the highest for the month for five years, and the increase is the largest year on year increase since September 2015 - was driven by post-Covid pent up demand from all buyer levels including first home buyers, investors and families looking to upgrade their property.

In Auckland, the number of properties sold this July was up 30.3 per cent on last year, when the market was at its lowest. The 2,596 sales are the highest for July in five years. Sales in the Waikato also reached a five year high for July. Some regions broke all July records: sales in Nelson were their highest since 1993. in Tasman the highest since 2002 and Taranaki the highest since 2003.

House prices too reached record highs: Nationally, house prices increased by 14.8 percent to $660,000, and in Auckland reached $920,000, up 11.5 per cent on last year and much the same as June. Just under 1500 sales were for over $1 million, the highest for four years.

REINZ chief executive Bindi Norwell says new listings are not meeting consumer demand. Photo / Supplied

“We’re still not seeing enough new listings come to the market to meet consumer demand right now. Hopefully, this will start to change as we move towards the warmer months of the year.”

Norwell said that Manukau City’s record median price of $928,000 is up from its previous pre-lockdown March of $920,000.

“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. 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,” says Norwell.

But faster days to sell, and the highest percentage of auctions for July since 2016 meant that the number of properties for sale reached the lowest ever for July, down to just 19,441. Even in the doldrums of last winter, there were 21,843 properties for sale, although Westpac economist Michael Gordon says that listings rebounded even faster than sales in the last two months.

“The surge in sales in July suggests a degree of pent-up demand following the Covid lockdown. There is also pent-up interest to sell. Consequently, the stock of unsold homes has risen since the lockdown ended. This is not a recipe for ongoing strength in house prices ” Gordon says.

The bank says that while it expects some renewed softness in prices by the end of this year, it is now looking unlikely that the market will be as weak as its original 7 per cent decline forecast.

“We will be shifting our forecasts to a 2.5 per cent decline between now and the end of the year. The market outlook is a balance between the appeal of record-low mortgage rates versus increasing financial stress among homebuyers and tenants, as the wage subsidy scheme expires and job losses start to mount. The current flare-up of Covid-19 will also give the housing market pause for thought.”