March was another incredibly strong month from a price perspective with 12 regions and 32 districts across the country seeing record median prices. The national median also reached a new record, increasing by $46,300 since last month, showing just how much pressure has been placed on house prices and how we desperately need more supply to come to the market.
Additionally, we’re seeing houses sell at their fastest pace in a March month ever and we’ve seen the highest percentage of auctions the country has ever seen since REINZ began keeping records, showing just how quickly the market is moving.
Looking forward over the next couple of months, we would expect house prices to continue rising, but we hope this will be at a slower pace than we’ve seen over the last six to 12 months. Hopefully the re-implementation of the LVRs, changes in government policy and the move towards winter will slow the rate of growth down a little, but only time will tell what effect they will have.
The number of residential properties sold in March across New Zealand increased by 31.2% when compared to the same time last year (from 7,408 to 9,721) – the highest for the month of March in 14 years. In March, 12 out of 16 regions saw annual increases in sales volumes, including Auckland, West Coast, Waikato, Canterbury and Nelson.
March’s result is much higher than many commentators would have expected, as on 1 March the first tranche of the LVR restrictions came back into effect with investors requiring a 30% deposit and owner-occupiers requiring a 20% deposit. Therefore, we would have expected sales volumes to slow a little as buyers took this into account, however, it might just be that we need a few more months for this to really start to take effect.
The REINZ House Price Index (HPI) for New Zealand, which measures the changing value of property in the market, increased 24% year-on-year to 3,756 a new high on the index.
In March, the median number of days to sell a property nationally decreased two days from 30 to 28 when compared to March 2020, the lowest for a March month since records began.
Highlighting the continued popularity of auctions as a successful sales method, March saw more than a third of all properties sold by auction (34%) – the highest percentage of auctions we’ve ever seen in New Zealand.
Inventory levels continue to fall, placing pressure on the housing market as the total number of properties available for sale nationally decreased by 6.1% in March to 19,437 down from 20,702 in March 2020 – 1,265 fewer properties compared to 12 months ago and 8,791 fewer properties than in March 2019.
At the top end of the market, the percentage of properties sold for $1 million or more increased from 20% (1,485 properties) in March 2020 to 34.8% (3,386 properties) in March 2021 – the highest percentage of million-dollar-plus properties ever sold.
