Signs Of The Housing Market Cooling
Maybe it’s just the usual winter slump, or maybe the Government’s investor changes are starting to bite. Whatever the reason, house prices aren’t going up at the same rate they were. But they’re still going up – in fact, every region saw a year-on-year increase from July 2020.
5 October 2021
Jen Baird, CEO of the Real Estate Institute of New Zealand, says it’s too early to say the reason for the slight decrease in the rate of price rises.
“The last two months have shown early indications that the rate of growth is starting to ease,” she says.
“However, it’s too early to say whether this is the usual winter easing we would normally see or if the Government’s intervention in the market and signalled changes to the OCR are starting to take effect.”
It was another recording-breaking round of price data.
Median prices for residential property across New Zealand increased by 25.2 per cent, up from $659,500 in July 2020 to a record $826,000 in July 2021, according to the latest REINZ data.
“The underlying value of property is holding strong and will likely do so for a few months yet,” says Baird.
Two out of 16 regions reached new record median prices, two regions saw equal record prices and 20 districts reached new record median highs.
The median house price for New Zealand excluding Auckland went up by 23.3 per cent, from $557,500 in July last year to a new record of $687,500 in July 2021.
Auckland again underpinned the strength in the New Zealand median price, reaching a record median house price in July, up 28 per cent from $918,000 in July 2020 to $1,175,000 in July this year.
Three other regions also hit record median prices: Canterbury, Manawatu/Wanganui and Southland.
Fewer houses sold
It’s a high-demand, supply-constrained market, says a statement from the REINZ.
The number of houses sold in July across New Zealand decreased by 11.7 per cent from the same time last year (from 8,135 to 7,187).
July 2020 was the first full month of real-estate market activity post-lockdown, so it saw an unusually high level of sales.
For New Zealand excluding Auckland, the number of properties sold in July went down by 17.2 per cent when compared to the same time last year (from 5,427 to 4,496).
In Auckland, the number of properties sold in July decreased by 0.6 per cent year-on-year (from 2,708 to 2,691).
The one-month and three-month movements for New Zealand on the REINZ House Price Index have shown a slight easing in the rate of growth, showing early signs of property values stabilising across the country.
Houses selling faster
In July, the median number of days it took to sell a property across the country decreased by three days, from 34 to 31, when compared to July 2020. That was the lowest for a July month since 2016.
And auctions are incredibly popular, says the REINZ. It was the highest percentage of auctions for a July month since records began.
“Auctions provide a good way of finding the value of a property when the market is moving quickly, which has been the case for some time now,” says Baird.
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