14 Sep 2021

House sales drop in lockdown but demand strong, prices up

10:48 am on 14 September 2021

The latest lockdown has done little to dampen confidence in the housing market.

Houses around Lyttelton area in Christchurch

The national median house price rose a seasonally adjusted 25.5 percent in the past 12 months to $850,000. Photo: RNZ / Nate McKinnon

The Real Estate Institute's (REINZ) house price index, which measures the changing value of property in the market, rose 31.1 percent in the year ended August to 4012.

The national median house price rose a seasonally adjusted 25.5 percent in the past 12 months to $850,000. The national median price excluding Auckland was $700,000, a 22.8 percent increase on a year ago.

"This latest lockdown has not dampened demand for, or confidence in, the housing market as we saw in early 2020," REINZ chief executive Jen Baird said.

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The number of properties sold in August fell by 26.5 percent when compared to the same time last year, reflecting the effect of the reintroduction of lockdown restrictions.

At the same time the number of properties available for sale fell by close to a third in the past 12 months to 12,259, the lowest level of inventory ever recorded.

"We have heard from across the industry that prices achieved on sales completed in the early part of this lockdown continue to illustrate an ongoing excess of demand over supply; prices are still rising," Baird said.

However, Baird expected more properties would soon come to market.

"It is this time of year that people start to prepare their property for the usual increase in spring sales activity, and it is expected that this will be stronger this year as listing is delayed as a result of lockdown.

"We understand that vendors have been preparing their properties for market, to list once we reach a lower alert level - we expect to see the result of this in our September data," Baird said.

The median number of days to sell a property fell three days to 30 days. August saw 26 percent of all properties sold via auction, the highest percentage ever recorded.

"Conducting an auction is a great way to understand the value of a property in a fast-moving market, and even with August being in alert level 4 lockdown for half the month, auctions still made up more than a quarter of all sales," Baird said.

Properties prices hit new median highs in four of out 16 regions, including Auckland, Waikato, Manawatu-Wanganui and Canterbury.

The median house price in Auckland is $1.2 million compared with $949,500 in August 2020.

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