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More evidence has emerged to support claims that Kiwis have transferred money they would have spent on international travel to the property.
The Real Estate Institute’s annual review shows that New Zealanders spent $ 60.8 billion on the real estate market during the 11 months through November, $ 12 billion more than the same period last year and an increase of nearly 25 percent. hundred.
In Auckland, the increase is even larger, totaling $ 20.8 billion, an increase of 40.8 percent.
KIRK HARGREAVES / Stuff
The real estate market saw a huge increase in revenue this year, despite the closings.
Bindi Norwell, CEO of REINZ, said one of the drivers of the surprises in 2020 had been our closed borders and lack of international travel.
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It is estimated that about $ 10 billion had stayed in the country instead of being spent on international travel and was diverted to other areas, such as properties, he said.
Nationally, the median sales price of a home increased nearly 15 percent during the year to date to $ 675,000 compared to $ 587,500 last year.
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Listings in many regions are now scarce.
Another way Covid-19 had disrupted the market was the central bank’s 12-month removal of loan-to-value (LVR) ratios in April to support the economy.
This had revitalized the market, giving buyers a reason to rush to make a purchase before restrictions are imposed again, Norwell said.
Low interest rates were another major factor that encouraged more investors to invest in properties to outperform the bank.
There was also the “Auckland effect,” the city’s rise in median prices after a steady three and a half years at around $ 850,000. Median prices hit the $ 1 million mark in October.
At the same time, urban housing across the country had become increasingly unaffordable. The Demographia International Housing Affordability survey placed median home prices at more than seven times median income.
House prices continued to strengthen in the regions as rising demand and a lack of supply of properties pushed up prices in some areas, particularly for buyers in the lower price bracket.
“We’ve seen record median prices hit in many parts of the country, and November itself set 11 new regional records, the likes of which we haven’t seen since October 2003, when the market was experiencing significant increases in house prices,” Norwell said. said.
“This year has certainly further highlighted that we need a consolidated response from industry and government to help address the unaffordable housing in New Zealand,” he said.
Martin De Ruyter / Things
A key factor in property spending was fear of missing something, Norwell said.
FOMO, or “fear of missing out,” had caused a sudden spike in the number of home sales and a drop in inventory levels, as people feared that if they waited too long, prices would rise too high or options would “run out.” “.
Despite a record official cash rate and low first-time homebuyer bank loan rates, Norwell said he still heard that access to finance was a barrier for many.
First-time buyers became more active in the market, rising 26.7 percent from $ 1.1 billion in October last year to $ 1.39 billion in October this year, according to the Reserve Bank. .
“We expect 2021 to see continued regional growth as workplaces become more flexible, remote work continues and New Zealanders settle into the ‘new normal,’ ” he said.
During the 11 months to November, Auckland house prices rose 11.4 percent to $ 941,000 compared to $ 845,000 last year.
Excluding Auckland, the median increased 13.8 percent to $ 565,000, up from $ 496,500 last year.
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Executive Director of the Real Estate Institute, Bindi Norwell, who recently announced that she would be leaving March to lead the GP Procare Group organization.
And property sales increased 6.2 percent in the same period last year, with 75,800 properties changing hands.
That was significant, given Covid-19 and the seven-week lockdown, Norwell said.
Sales volume was largely driven by Auckland. Excluding the city, sales were down nearly a penny to 50,041.
But property sales in Auckland were up 23.1 percent from 25,759, again sizable, given Auckland’s additional two-and-a-half week shutdown in August.
The time taken to sell a property was reduced to 35 days and, excluding Auckland, it was reduced to 32 days.
