Well, 2019 is gone. But it went out with a big bang as far as the housing market is concerned.
Real Estate Institute of New Zealand (REINZ) figures out on Thursday showed that around the country house sales in December were up 12.3% compared with the same month a year ago. Median prices actually rose 12.3% as well, year-on-year, while the number of days taken to sell decreased by four days to 31 days - the lowest also in three years.
The sales figure, at 6285, was the highest for a December month in three years.
In Auckland - which has been the market laggard recently - the temperature was even hotter.
Its sales rose by 31.7% compared with December 2018.
The number of sales in Auckland, at 1860, was the highest in the City of Sails for a December month since 2015.
This activity occurred against a backdrop of very few listings nationally.
REINZ says the total number of properties available for sale nationally decreased by -24.5% in December to 18,230 down from 24,158 in December 2018 – a decrease of 5928 properties compared to 12 months ago and the lowest level of inventory since records began.
Kiwibank senior economist Jeremy Couchman said overall, momentum "has certainly shifted" in the housing market "and it is likely to continue to heat up over 2020".
He said the Reserve Bank's move to cut the Official Cash Rate from 1.75% to 1% during 2019, leading to record low mortgage rates, "looks to have stoked demand".
"In addition, NZ continues to face housing supply and demand imbalances – exacerbated by population growth remaining well above average."
ASB senior economist Mike Jones said the December REINZ data "joined the collection of other economic data" suggesting the NZ economy had a strong end to 2019.
"Indeed, we suspect at least part of the bounce witnessed in the likes of business confidence and retail spending late in the year can be traced to the clear brightening in the housing market.
"Low interest rates work, eventually. House price inflation is accelerating faster than RBNZ expectations thus today’s figures add to the risk the Bank won’t have to cut interest rates again."
REINZ says median house prices across New Zealand increased by 12.3% in December to $629,000 up from $560,000 in December 2018 and just $1,000 off November's record of $630,000. Additionally, five regions saw new record median prices.
Median house prices for New Zealand excluding Auckland increased by 11.5% to a record equal of $535,000, up from $480,000 in December last year, but the same price as November 2019.
In Auckland, median house prices increased by 3.5% to $890,000 – up from $860,000 at the same time last year - and was the highest price for the region in 33 months. These results are in line with the REINZ House Price Index (HPI) which saw property values in Auckland increase 4.0% annually to a new record high of 2,931.
Record median prices were recorded in:
- Northland with a 12.3% increase to $539,000 up from $480,000 at the same time last year
- Manawatu/Wanganui with a 27.8% increase to $402,500 up from $315,000 at the same time last year
- Taranaki with a 14.1% increase to $430,000 up from $377,000 at the same time last year
- Tasman with a 12.5% increase to $655,000 up from $582,000 at the same time last year
- Southland with a 32.0% increase to $330,000 up from $250,000 at the same time last year.
The only region to experience an annual decrease in median price was the West Coast with a fall of -13.6% from $220,000 in December 2018 to $190,000 in December 2019 – the lowest price in three months.
The number of homes sold for less than $500,000 across New Zealand fell from 41.6% of the market (2,327 properties) in December 2018 to 31.9% of the market (2,008 properties) in December 2019.
The number of properties sold in the $500,000 to $750,000 bracket increased from 29.9% in December 2018 (1,672 properties) to 33.1% in December 2019 (2,078 properties).
At the top end of the market, the percentage of properties sold for $1 million or more increased from 13.0% (726 houses) in December 2018 to 16.5% (1,039 houses) in December 2019.
REINZ House Price Index (HPI) reaches new record high for NZ and 10 regions
The REINZ House Price Index for New Zealand, which measures the changing value of property in the market, increased 6.6% year-on-year to 2,915 – a new record high.
The HPI for New Zealand excluding Auckland increased 8.9% from December 2018 to 2,902 another new record high.
The Auckland HPI increased by 4.0% year-on-year to 2,931 a new record high and the second consecutive positive annual increase in 15 months.
In November, Southland again had the highest annual growth rate with a 20.6% increase to 3,292 a new record high. In second place was Manawatu/Wanganui with an annual growth of 19.2% to a new record high of 3,408 and again in third place was Gisborne/Hawke’s Bay with a 13.8% annual increase to a new record high of 3,022 – only the second time Gisborne/Hawke’s Bay has gone over the 3,000 mark.
In December, 10 out of 12 regions reached record high HPI levels; the only exceptions were Taranaki (+10.4%) and Canterbury (+2.9%) showing the overall strength of the property market.
Days to Sell decrease
In December the median number of days to sell a property nationally decreased by four days from 35 to 31 when compared to December 2018 – the lowest days to sell in three years. This figure was two days fewer than November 2019’s figure of 33 days.
For New Zealand excluding Auckland, the median days to sell decreased by four days from 34 to 30 – the lowest days to sell in three years. Auckland saw the median number of days to sell a property fall from 39 to 34 year-on-year – the lowest days to sell in two years.
Southland again had the lowest days to sell of all the regions at 21 days, down two days from the same time last year, but three days higher than November 2019’s figure, which was the lowest median days to sell since August 2007.
December saw six regions with the median number of days to sell below the 28 mark, the highest number of regions with property selling that quickly since April 2017.
Northland had the highest days to sell at 45 days, down three days on December 2018, and down two days on November 2019’s figure of 47. The West Coast had the second highest median days to sell across the country at 41 days – down 35 days on the same time last year, and down 31 days on November 2019’s figure of 72.
'A solid end to the decade'
REINZ chief executive Bindi Norwell said the property market "had a solid end to the decade".
"Looking around the country, 12 out of 16 regions saw annual increases in the number of properties sold – the highest number of annual increases in three months – with particularly strong increases in Auckland, the Bay of Plenty, Southland, Northland and Canterbury," she said.
"Sales in Auckland were the highest for the month of December in four years, with particularly strong uplifts in sales volumes in Papakura District (+65.0%), North Shore City (+63.6%) and Waitakere City (+58.3%)."
Norwell said December saw 15 out of 16 regions with annual increases in the median house price and five regions with record median prices, "reflecting the continued uplift in residential property prices that we’ve seen for a number of months now".
Around the regions
"Southland, Manawatu/Wanganui and Gisborne again saw really strong uplifts in price, with demand for properties in these regions outstripping supply and adding to the premium people are prepared to pay. There’s also likely to be an element of increasing vendor expectations adding to the price increases as month after month sellers in the region are reading stories of higher property prices.
"Wellington was also a standout region in December, with four areas seeing new record median prices - Kapiti Coast District ($675,000), Masterton District ($477,000), Porirua City ($775,800) and South Wairarapa District ($625,000) showing the continued strength of the capital city’s property market.
“Looking at the Auckland region, Manukau City hit a new record median high of $900,000 in December, with Rodney District not far behind with a median of $890,000. North Shore City also saw a 7.1% annual uplift in median price, reaching $1,050,000 – the first time the median has been over the million-dollar mark in four months,” Norwell said.