New Zealand housing market remains resilient in September

Despite the recent COVID-19 restrictions in New Zealand, the housing market remained resilient in September, according to the latest data by the Real Estate Institute of New Zealand (REINZ).

It revealed that median house prices across New Zealand increased by 15.4% from $689,000 in September 2020 to $795,000 in September 2021 – with seven of 16 regions having reached new record median prices, the most since April 2021.

September 2020 saw nine regional records, but last month's total number of records remained above average for a September month.

Excluding Auckland, the median house prices in the country increased by 23.1% from 585,000 in September 2020 to a new record of $720,000 – marking an increase of 2.9% from August 2021 ($700,000) and indicating that confidence remained in the property market after the easing of COVID-19 alert level restrictions outside of Auckland.

Meanwhile, in Auckland, the median house prices increased by 20.4% from $955,000 in September 2020 to $1,150,000 last month. However, this figure was down 4.2% from its record $1,200,000 in August 2021.

REINZ chief executive Jen Baird said the latest data showed that confidence remained high, buyer demand was strong, and buyers outside of Auckland might be pleased to see more properties coming to the market.

“Prices are proving resilient, with some regions noting a decrease in the number of first-home buyers, in part due to rising prices,” Baird added.

Read more: Tony Alexander, REINZ outline latest buyer activity in property market

Team Kearins, owner of Century 21 New Zealand, commented that the red-hot demand for housing despite the challenges brought by the pandemic proves the real resilience of the market and Kiwis' strong and ongoing belief that housing is still a good investment.

Century 21 offices in south of Auckland, for example, continue to report strong buyer interest and great sale prices under Level 2. With Auckland in Level 4 and Level 3 lockdowns throughout September, activity was naturally down. However, the region continued to do relatively well, with pockets of price growth reported.

Despite banks taking note of the official cash rate (OCR) increase in September and buyers becoming increasingly aware that rate rises were imminent, the real estate market soldiered on, Kearins said.

“These numbers show that as long as servicing a mortgage remains comparable or even cheaper than paying rent, prospective buyers will not be put off,” he added.

“As well as an ongoing housing shortage, another contributing factor to the strength of the market is the painful alternative of renting. Let's not forget New Zealand is one of the most expensive places to rent when you compare the proportion of tenants' rent with other monthly outgoings.”