Sales Numbers Drop Sharply

15/06/2020

According to figures from the Real Estate Institute of New Zealand's (REINZ) latest monthly sales data, just 3990 homes sold across the country in May, which is 47% down from the same month in 2019. Auckland was slightly better than the national average, with 1117 homes sold and a 45% reduction compared to the year before. The median days to sell has also moved sharply, from a national average of 41 days to 58 days in May, 2020. The Auckland market is moving a little slower than the rest of the country, up 16 days to an average of 61 days.   

While these figures look very worrying at first glance, according to REINZ chief executive Bindi Norwell, they was not surprising due to the 12 days of level 3 restrictions over the month: "These restrictions meant only two property viewings, per property, per day were allowed, making it difficult to get interested parties through a property in a timely and efficient manner." In an unprecedented shutdown situation, it is basically impossible to get a real reading of market movements.

In a great sign for the underlying health of the property market, prices have remained in record territory despite the pandemic. New Zealand's median sales price reached $620,000 in May, up 6.9% on the $580,000 median sales price from May 2019. Auckland's median sales price also jumped in May, up 7.1% from $850,000 to $910,000. Once again, the New Zealand housing market was far from consistent, with Southland experiencing the biggest price increase at 22.8% to $345,000, Tasman not far behind at 19.9% to $701,500, and Manawatu/Wanganui recording 18.9% growth to $415,510.

Low supply and high demand before the pandemic are partly responsible for these great numbers, with new mortgage applications and valuation requests also reasonably solid. According to Norwell, "what continues to surprise us, is the fact that there are still regions with increases in median price and that there are still regions experiencing record median prices – a far cry from some of the doom and gloom predictions that were immediately touted when Covid-19 first hit the country."

Make no mistake however volatility in prices between regions is a reflection of uncertain times, with five regions seeing prices fall from April to May. According to Westpac chief economist Dominick Stephens, house prices are still on track for a 7% decline between March and December. REINZ's house price index, which attempts to give a more accurate picture of overall home values, showed a slight 0.5% decrease in national house values over the past month, with a 0.3% seasonally adjusted drop added to a 0.9% fall in April for a 1.2% decline since the lockdown.