A real estate bounce back
For now, at least, we’re seeing the property market pick up strongly since the COVID lockdown on homes.co.nz. Weekly listing volumes on homes.co.nz are approx 40% up on the same time last year. We note that the listing stock on homes.co.nz does not provide the complete picture but the trend is confirmed by CoreLogic who also reported an 11% increase in June sales volumes from June 2019.
Analysis of the current properties being listed in the market paints an interesting picture. The listing stock in both Wellington and Auckland is at the lower-value end of the market. In Auckland, for example, the median HomesEstimate of current listings is only $872k, over $100k less than the city’s HomesEstimate of $995k. The lower prices of current listings in both cities is largely a result of high numbers of Apartments being for-sale.
The listing stock is largely consistent with total housing stock in the other main centres except for Dunedin where current listings are priced well above the city’s median HomesEstimate of $525k. Another interesting insight is Napier, where vacant sections are forming 15% of the current listing stock. Maybe being locked down in someone else’s renovations has prompted many to build themselves.
Brad Olsen, Senior Economist at Infometrics, says the bounce back is set to continue, at least in the short-term, with the widely predicted market downturn pushed out to 2021.
The property market appears set to continue to rise unabated at present as pre-pandemic momentum and substantial economic support prop up activity. However, we expect that softer prices will begin to be seen around the end of the year.
Lower mortgage rates are encouraging for those wanting to get into the market, but lower availability of credit will keep a lid on activity. As the wage subsidy and mortgage holiday end, we’d expect that some parts of the country will start to show price declines as some become unable to meet their repayments and put their house on the market, pushing up sales.
We’d expect to see still strong demand from buyers in the market, with sellers adopting more of a wait-and-see approach at the moment with uncertainty persisting. This uncertainty around key drivers of the housing market – including construction levels and net migration (with larger than anticipated numbers of Kiwis returning home) means that we’ve pushed out our expectations for lower prices into 2021.
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Monthly HomesEstimate Property Update
The homes.co.nz Monthly Property Update is generated using homes.co.nz’s August 2020 HomesEstimates, providing an up-to-date perspective on house values around New Zealand.
Trends in our Main Cities
The property market remains resilient, and so far continues to defy many predictions. Auckland’s median HomesEstimate is now $995K, up 12.4% from this time last year, and we are seeing continued growth across the other main centres.
With listings on homes.co.nz well up on last year, the sales volume outlook is beginning to look strong. This is reiterated by Ray White, who has seen record sales in July 2019, up 52% from July 2019. With continued low interest rates and limited policy changes in the lead-up to an election, we expect prices to remain steady for a few months to come.
NZ’s First Home Buyer HomesEstimate
How do we calculate these figures?
The homes.co.nz Monthly Property Update is generated using homes.co.nz’s monthly HomesEstimates and provides an up-to-date perspective on house values around New Zealand. By valuing the entire housing stock, the homes.co.nz Monthly Property Update can compare median values from month to month in a consistent and reliable way. Our HomesEstimates are calculated for almost every home in New Zealand by an algorithm that identifies the relationships between sales prices and the features of a property.
Established in 2013, homes.co.nz is NZ’s first free property information portal eager to share free property information to New Zealanders.