Latest data from the REINZ revealed that the property market continued to surpass expectations in August, supported by low interest rates, the prospect of rates moving still lower, a lack of listings, ongoing post-lockdown demand, the removal of LVR’s and first time buyers trying to get into the market. Activity continues to be underpinned by strong levels of interest and engagement from all buyer levels, including first home buyers, investors and families looking to upgrade their property.
REINZ CEO, Bindi Norwell, noted that we may start to see additional pressure on house prices and affordability unless we see more listings coming onto the market before Christmas.
At a national level, the median house price recorded an annual increase of 16.4%. The national median house price was $675,000 in August, compared to $659,000 in July and $580,000 in August 2019.
The Wellington region again recorded double digit price growth, with annual house price inflation lifting to 12.8%, taking the median price to $720,000 from $696,800 in July. As a result, the Wellington region remained the second highest regional price, behind Auckland.
Within the Wellington region, prices in Wellington city continued to hold above $800,000 as they have in recent months – recording a median price of $820,000, up 1.9% on a year earlier. Encouragingly for buyers, new listings were up 27% compared to a year earlier.
Prices in the Kapiti Coast district remained close to July’s record median price of $700,000, recording a median price of $698,000 in August, up 14.4% over the year.
Record median prices were recorded in Lower Hutt City and Upper Hutt City of $670,000 and $663,200 respectively, the cities recording annual house price inflation of 22.5% and 14.9% in August.
The Carterton, Masterton and South Wairarapa districts all continued to record strong annual house price growth in August, recording median prices of $480,000, $470,000 and $560,000 respectively. Adding a bit more balance to the market, new listings increased by 91.2% compared to the same time last year. Double digit house price growth is in the wake of strong interest from people looking to move out of Wellington for the lifestyle.
Sales in the Wellington region stabilised in August, following a rebound in June and July. This post-lockdown activity meant that the sales count of 766 sales was up 31.8% on the level in 2019.
The Wellington region’s average days to sell of 29 days was unchanged from July, reflecting ongoing tightness in the market – this figure is 6 days less than the 10-year average for August of 35 days. This is also reflected in tight inventory levels. The REINZ made the following observations with respect to the Wellington market:
- Low interest rates, wage subsidies and continued buyer demand is likely to have contributed to the increase in sales and house prices in the region
- There is a real mix of first home buyers and investors attending open homes
- There has been more demand for apartments in Wellington Central as well as demand for homes in the outer suburbs for people who want to move out of the city after spending their time in a small apartment during the lockdown period.
All this points to a market influenced by short supply amidst strong levels of interest and engagement from all buyer levels, underpinned by support from low interest rates, the prospect of rates moving still lower, ongoing post-lockdown demand and first time buyers trying to get into the market.