Lockdown has not stopped house prices rising

House prices were 25 percent higher in August than at the same time last year, despite a nationwide Level 4 lockdown, new figures from the Real Estate Institute show.

The national median price hit a record $ 850,000 last month, up 25.5 percent from $ 677,400 in August 2020. It also rose 3 percent from the July price.

Each region has seen an annual increase since August last year, while four of 16 regions – Auckland, Waikato, Manawatu / Wanganui, and Canterbury – hit record median prices, as did 25 districts.

The median price for the Auckland region rose 26.4 percent to $ 1.2 million in August.

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Waikato rose 23.8 percent to $ 780,000, Manawatu / Wanganui rose 35.3 percent to $ 610,000, and Canterbury rose 24.3 percent to $ 619,000.

The Wellington area median rose 21.5 percent to $ 875,000, while the Christchurch median rose 31.3 percent to $ 650,000.

Real Estate Institute executive Jen Baird said the lockdown didn’t dampen demand for or confidence in the market like it did earlier last year.

“We heard from across the industry that the prices on sales that were made at the start of this lockdown continue to reflect persistent excess demand over supply. prices are still rising. ”

Due to the strength of the market, the institute’s property price index hit a new high nationwide, while nine of the twelve regions hit record levels in August, she said. “This shows that the underlying value of real estate remains strong.”

Delivered

Jen Baird, CEO of the Real Estate Institute, says the lockdown will affect sales, but not prices.

But August sales fell in most of the country. They fell nationwide by 26.5 percent to 5,753, compared to 7,828 at the same time last year.

It was the fewest properties that were sold in an August month since 2014.

Nelson, Southland and the West Coast saw the largest annual sales declines, while Auckland sales fell 33.7 percent from August last year to 2,346.

Sales in Wellington and Christchurch were down 34.8 and 17.0 percent, respectively, from last August.

Baird said the level 4 lockdown had an expected impact on the number of properties sold.

This was largely due to the restrictions put in place from a lockdown perspective, but New Zealand continues to have record levels of inventory, which means fewer properties are available to buy, she said.

“People’s ability and confidence to buy and sell properties within the warning level restrictions appear to vary across the country, which is reflected in the number of properties sold in each of the regions.

While agents had been through all of this before and were familiar with digital solutions for much of the process, some vendors and buyers felt less comfortable online and preferred to wait for restrictions to be lifted, she said.

“For regions where connectivity rates are high and where higher alarm levels have occurred more frequently, we have found a lower impact on the number of properties sold.”

Alden Williams / stuff

Auckland’s median price rose 26.4 percent to $ 1.2 million in August.

Even so, the average days to sale were the lowest for an August month since 2016, from 33 days last year to 30 days.

But the availability of properties for sale continued to limit activity, with another record low in inventory reported in August, up from the record low seen in July 2021, she said.

“This is the time of year when people are starting to prepare their property for the usual spike in spring sales activity and it is expected that this will be stronger this year as listing is delayed due to the lockdown.

“We know that sellers have their properties ready for the market to list as soon as we get a lower warning level – we expect this to show up in our September data.”

Things

While auctions accounted for over 26.0 percent of all sales in August, The Block NZ’s live auction at Point Chevalier has been postponed.

The highest percentage of homes were auctioned off in an August month since records began.

Baird said even with level 4 banned for half the month, auctions still accounted for over a quarter (26.0 percent) of all sales.

“Solutions were found to run effective online auctions, which meant sellers could continue their sales process and buyers didn’t lose any of the transparency that an auction offers.”

Kiwibank’s senior economist Jeremy Couchman said the numbers showed the lockdown had some surprising results for the market, with sales falling but prices rising.

The rise in house prices contrasted with last year’s lockdown, which resulted in a cautious price decline, he said.

“The opposite result seems to be explained by a few days of lockdown in August and the completely different market climate this time. There was still great interest in the housing market before the lockdown. “

The real estate industry and supporting services such as transportation and banking are also better prepared to process transactions while on the train during the lockdown, he said.

“If you look at the current lockdown bias, the outlook for housing remains unchanged. Rising mortgage rates, further restrictions on lending, affordability restrictions and booming new residential construction should cool the market in the coming year. “

source https://www.bisayanews.com/2021/09/14/lockdown-has-not-stopped-house-prices-rising/