Figures from REINZ reveal the unrelenting pace of property sales continued, with 7694 homes sold last month, up from 6964 in February 2020.
Typically, Auckland is leading the way and house sales accelerated by 34.6% year-on-year, from 2061 to 2775. This volume is the highest for the month of February in 14 years.
Across the country, excluding Auckland, the number of properties sold increased by 6.1% to 5189 last month when compared to 4890 sold at the same time last year. Last month nine out of 16 regions saw annual increases in sales volumes.
Regions with the biggest increases were West Coast, +58.0% (from 50 to 79 – 29 more houses) – the highest it’s been since March 2004 and the highest for February ever; Taranaki, +31.4% (from 153 to 201 – 48 more houses) – the highest for February in four years; and Northland, +22.5% (from 191 to 234 – 43 more houses) – the highest for February in four years.
REINZ chief executive Bindi Norwell says it is highly likely some of the elevation in sales can be put down to both investors and owner-occupiers looking to buy ahead of the LVR restrictions coming back into effect and the slight uplift in listings seen over the past couple of months.
“Interestingly, sales volumes on the West Coast were the highest in nearly 17 years, with a 58.0% increase on the same time last year. Agents point to an uplift in enquiries across the region in part due to the affordability of the West Coast but also for lifestyle reasons.
Expectations are the West Coast is likely to remain busy for the next couple of months,” says Norwell.
She says Auckland’s record number of sales is remarkable when the city had four days of level 3 coronavirus lockdown last month and shows how adaptable both agents and the public are at moving to technology to buy and sell houses when physical viewings are extremely limited.
Prices still increasing
On the price front, Auckland set a new median record of $1.1 million, a surge of 24.3% from $885,000 at the same time last year, REINZ figures show. Auckland city, Franklin, Manukau, North Shore, Papakura and Waitakere all reached new record median highs.
Wellington, Manukau and Waitakere now have median prices of $1 million or more, meaning that seven districts across the country have now have reached that threshold.
Across New Zealand median prices escalated by 22.8% from $635,000 in February 2020 to $780,000 in February this year, a new record high.
The REINZ House Price Index (HPI), which measures the changing value of property in the market, increased 21.5% year-on-year to 3657 a new high on the index. This is the first time the index has exceeded the 3500 mark and is the highest HPI annual percentage increase since May 2004.
Auckland’s house price values increased 20.7% year-on-year to 3662 meaning house values in the City of Sails have increased by more than 260% since 2003 when the index base level was set.
Using the REINZ data, Westpac’s says its seasonally adjusted house prices rose another 3.7% in February - the second-biggest monthly increase on record.
On the same measure, house prices have risen 8% over the past three months, the fastest three-month increase on record. The current house price boom is starting to eclipse even the 2003 episode, says Westpac chief economist Dominik Stephens.
Norwell says February was an extraordinary month, with a new record median price for the country and 12 regions and 37 districts all reaching new or equal records.,” says Norwell.
Westpac’s data shows a strong lift in house sales, although not enough to fully recover from the sharp drop in January sales. That said, says Stephens, house sales remain high, the number of days it takes to sell is extremely low, and other data shows a lack of inventory available for sale.
Inventory levels are continuing to fall, placing pressure on housing market, Norwell says. The total number of properties available for sale fell by 24.2% in February to 15,829 down from 20,875 in February last year – 5046 fewer properties compared to 12 months ago and 11,021 fewer properties than in February 2019.
“These are classic indicators of ongoing rapid price increases in the near future, particularly if ultra-low mortgage rates persist,” says Stephens.
Westpac’s forecast is for 17% house price inflation over 2021 as a whole, after a 12% increase in 2020. “The pace of price increases is far faster than what is required to attain 17%.”
Although the Reserve Bank is forecasting an abrupt slowdown in the housing market from the second quarter of this year,Stephens says REINZ’s latest data will be a challenge to that view.
Norwell says it’s likely the housing data will make difficult reading for the thousands of renters and first home buyers who are one day hoping to be able to buy a property. “Hopefully the reintroduction of the loan-to-value (LVRs restrictions) will start to slow down the rate at which prices have been rising, and the market will stabilise.
“Now more than ever, the country’s political parties need to work closely together with key industry players to start addressing the unaffordability issues and housing shortages the country faces.”
For a number of months, REINZ has been calling on the government to review the First Home Loan Scheme as the percentage of properties eligible for the scheme continues to fall. “In Auckland alone, less than 20% of properties sold are eligible for support, showing just how out of reach the programme is with where house prices have now moved to,” says Norwell.
Median days to sell lowest in 17 years
Across half of the country it took less than 30 days during February to sell a house – the first time this has happened since records began.
During the same period the median number of days to sell a property nationally dropped six days from 36 to 30 when compared to February last year.
For New Zealand excluding Auckland, the median days to sell fell by five days from 34 to 29, the lowest for a February month in 17 years.
In Auckland the median number of days to sell a property fell by five days from 39 to 34, the lowest for the month of February in six years.
Properties in Taranaki have sold at the fastest rate of any region with the median number of days to sell at 21 compared to 25 in February last year.
Houses in Northland took the longest to sell at 47 days, albeit down from 60 days at the same time last year and the lowest February month for 14 years.
