New Zealand real estate sales in April were the highest they’ve been since the last market peak of 2016, with 7218 properties changing hands and median house prices up 19 percent on last April to $810,000.
The figures, released by the Real Estate Institute of New Zealand, showed a drop from March’s 14 year high of 9721 sales and median price of $825,300.
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But REINZ acting chief executive Wendy Alexander blames that in part on the lowest level of inventory for April since records began.
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She also says that while seasonal drops in April are the norm, “there is definitely a wait and see approach from a number of investors and some first time buyers.
"The ongoing lack of supply continues to put upward pressure on house prices. We were still surprised by the strength of rises in places such as Gisborne, Manawatu/Whanganui, Marlborough and Otago.”
The Cook Street, Te Haupara, bungalow had many original features. Photo / Supplied
Gisborne had the highest median price increase in the country, up a whopping 72.5% on April last year to $690,000. The city that usually tops the country in share of properties selling at auction - in April, 46.7 %, in March 59.6% of properties sold under the hammer – saw days to sell drop to 35 days, three days faster than last month.
Simon Bousfield, Bayleys director for Gisborne, is not surprised at the figures showing prices pushing up so dramatically.
“It’s the pressure of lack of supply and excess demand. We do 12-plus auctions every fortnight and it’s not uncommon to have five or six buyers per property, even up to 10.
“It’s a problem that stock levels are not enough – they’re probably at a third of what they should be. We could sell three times as much if we had it.”
A 1950s family home at 17 Seymour Road, Inner Kaiti, sold for $840,000. Photo / Supplied
Bousfield says that the surge in the region had been building for eighteen months, well before Covid, and picked up post-lockdown in a matter of weeks.
He said auctions went quiet in late April, on the back of the Government’s announcement of investor tax changes, but dramatically bounced back by early May.
“They came flying back at the last auction. They took stock and realised that property is a good place to put your money.”
The riverside bach at 4 Riverside Road, Whataupoko, sold for $520,000. Photo / Supplied
The growing demand in Gisborne is from a mix of both locals and people moving into the region. Bousfield estimates about 40 percent of buyers, both owner occupiers and investors, are from Wellington, Auckland and Bay of Plenty, moving for the new jobs opening up as well as the lifestyle.
“A fair few post-Covid are coming back to be close to family. They moved away and now they want to come home for the lifestyle.”
The pressure on prices is more on the lower and upper ends, says Property Brokers Gisborne manager, Stefan McNeely.
“The stats that say our median price is now $690,000 are confusing. We’re seeing the middle market – that $540,000 to $650,000 range – is tougher. People either want a completely done place at the higher prices, or something under $500,000 that they can do up and add $100,000 value.
Bidders paid $417,000 for a starter home at 61 Oxford Street, Gisborne. Photo / Supplied
“Some people might begin holding back now, even expecting prices might come down from that $690,000 median. Auction campaigns are stretching back out to four weeks, they were two or three weeks. We'll go back to normal, not the rapid rises we’ve been having.”
At Bayleys auctions last week, several higher priced properties sold for well above the rating valuation, which was only set in September 2020.
A smart 1950s three-bedroom house at 17 Seymour Road, Inner Kaiti, sold for $840,00 under the hammer, $242,000 above rating valuation while a large four-bedroom bungalow at 40 Cook Street, Te Haupara, achieved $715,000, a $257,000 jump from its valuation.
4 Riverside Road, a one-bedroom bach on a tree-lined section beside the Waimata River in Whataupoko got $94,000 above its valuation, selling for $520,000. And a central Gisborne 1970s three-bed home at 61 Oxford Street, marketed as a starter home, sold just on valuation at $417,000.
