New Zealand’s housing market continues its upward trajectory

While January is usually a time for the housing market to slow down, with New Zealanders enjoying their summer holidays, January 2021 has broken from the norm. Median house prices across the country increased by 19.3 percent last month, as compared to January 2020.

So how was the start of 2021 for the housing market? Read on our latest update.

‘Fear of missing out’ continues to drive up housing prices

According to REINZ’s January data, the first month of 2021 was “anything but normal”.

The report showed that despite the summer break, which tends to cool off the the property market during January, median house prices increased from $612,000 in January 2020 to $730,000 in January 2021.

Bhindi Norwell, chief executive at REINZ, said the reason why houses sold faster than ever during January in 17 years, is because “the fear of future price rises and the fear of missing out lingers deep in buyers’ minds and is impacting people’s buying behaviour.”

In addition, Auckland’s median house price rose by 14.9 percent, from $870,000 to $1,000,000 year-on-year. Median house price in the rest of the country were sitting at $602,000 in January 2021, up from $525,000 last year. Four regions, in particular, saw record median prices: Bay of Plenty, Hawke’s Bay, Taranaki, and Nelson.

Highest and lowest January sales volumes in years

According to the report, more properties were sold across New Zealand during January in 2021 than seen in five years, with sales volumes increasing by 3.2 percent compared to January 2020.

This seems to be mostly driven by the Auckland property market, where sales increased by 37.6 percent year-on-year for the month of January. For New Zealand excluding Auckland, the volume of sales in January 2021 actually decreased by 10.3 percent year-on-year – the lowest for January in seven years, and the first annual drop observed in eight months.

Besides Auckland, annual sales volumes for January increased in six other regions: West Coast (+54 percent, highest January sales in 15 years), Southland (+18.4 percent), Canterbury (+6.4 percent, highest January sales in 14 years), Northland (+3.8 percent), and Waikato (+2.8 percent, highest January sales in five years).

On the other hand, seven regions had their lowest sales performance in years, for the month of January.

• Wellington – lowest ever
• Tasman – lowest in 12 years
• Hawke’s Bay – lowest in 10 years
• Marlborough – lowest in 10 years
• Otago – lowest in 10 years
• Manawatu/Wanganui – lowest in nine years
• Taranaki – lowest in six years

Like to make an informed decision about your mortgage?

Having a conversation early on with your lender can give you a good steer on the sort of budget you are likely to be working with in the conditions that you might have to satisfy. This will give you an idea of how easy a purchase could be. As mortgage advisers, we can give you a head start and help you liaise with your lender.

Do you have all the information that you need to make the decision?

Get in touch – as financial advisers, we can help you make an informed decision about the timing and process of getting a mortgage, so that you have the full picture before you take the first big step towards your future.

 

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.