The annual review of New Zealand's residential property market in 2020 has shown a 24.7 per cent increase in overall spend from $48.7b for the 11 months ending November 2019 compared $60.8b for the 11 months ending November 2020.

This is according to the latest data from the Real Estate Institute of New Zealand.

In Auckland, the increase is even higher, with a 40.8% increase from $20.8b for the 11 months ending November 2020, to $29.2b for the 11 months ending November 2020 – an additional $8.4b.

'The 2020 property market has performed in a way that we may not have expected just 11 months ago," says Bindi Norwell, Chief Executive at REINZ.

Bindi says the results have been influenced by a number of key themes including:

1. COVID-19 – the impacts of this year's global pandemic, the various alert levels and lockdowns that New Zealand went into have all impacted this year's property market, however, not in the way that many people, economists and commentators were initially expecting
2. No international travel – it has been estimated that approximately $10 billion that would have been spent on international travel this year has instead stayed in the country and been diverted to other areas, such as property
3. LVRs - The Reserve Bank's decision in April to remove LVR restrictions for a 12-month period to support the financial stability in the economy – this has been a key factor in invigorating the market, particularly as it approaches re-introduction and buyers hurry to make a purchase before these restrictions are placed again
4. Low interest rates – encouraging more investors into the market, as better returns will be made than having money sit in the bank
5. Auckland effect – experiencing an uplift in median prices after three and a half stable years around the $850,000 mark. Median prices started lifting in late 2019, and reached the $1 million mark in October 2020
6. Increasing unaffordability – New Zealand's urban housing market is considered ‘severely' unaffordable according to the Demographia International Housing Affordability survey, as median house prices are more than seven times the median income
7. Continued strength of the regions - in terms of price growth with increased demand and a lack of supply of properties, putting pressure on prices in some areas, particularly as buyers in the lower price brackets were priced out of the main centres
8. Record low OCR - and low bank lending rates has meant eased accessibility for more first-time buyers, however, we are still hearing that accessing finance is a barrier for many
9. First time buyers – have become more active in the market with lending to first home buyers up 26.7% from $1,102 million October 2019 to $1,396 million October 2020 according to the Reserve Bank
10. FOMO - Increasing sales volumes and decreasing stock levels have created an intensified fear of missing out for some purchasers, encouraging more people into the market, trying to secure a property before prices increase too much or options ‘run out'.

'This year has been an interesting one for the real estate industry – we've seen record median prices reached in many parts of the country, with November itself seeing 11 new regional records – the likes of which we haven't seen since October 2003 when the market was seeing significant increases in house prices.

'The increasing prices across the country combined with the increasing sales means that when we look at the total value of property sold in the 11 months ending November 2020 compared to the same period in 2019, we see a 24.7 per cent increase, showing that the overall spend across New Zealand in the property market has increased significantly from $48.7b to $60.8b.

'We are expecting 2021 to see ongoing regional growth as workplaces become more flexible, remote work continues and New Zealanders settle into the ‘new normal'.

"This year has certainly highlighted further that we need a consolidated industry and government response to help address housing unaffordability across New Zealand.".

Median Sale Price

• The National median sale price increased 14.9 per cent for the 11 months ending November 2020 to $675,000 when compared to the 11 months ending November 2019 ($587,500)
• The median sale price for New Zealand excluding Auckland increased 13.8 per cent for the 11 months ending November 2020 to $565,000 when compared to the 11 months ending November 2019 ($496,500)
• The Auckland median sale price increased 11.4 per cent for the 11 months ending November 2020 ($941,000) when compared to the 11 months ending November 2019 ($845,000).

Sales Volume

• The number of residential properties sold across New Zealand for the 11 months ending November 2020 totalled 75,800 which is a 6.2 per cent increase on the same period last year, when 71,405 properties were sold – which is significant, given COVID-19 and the seven week lockdown
• The number of residential properties sold across New Zealand excluding Auckland for the 11 months ending November 2020 totalled 50,041 which is a -0.9 per cent decrease on the same period last year when 50,475 properties were sold
• The number of residential properties sold across Auckland region for the 11 months ending November 2020 totalled 25,759 which is a 23.1 per cent increase on the same period last year when 20,930 properties were sold – which is considerable, given the additional two and a half week lockdown that Auckland had in August.

Days to sell

• The median number of days to sell a residential property across New Zealand decreased 5 days for the 11 months ending November 2020 compared to the 11 months ending November 2019 (from 37 to 35 days)
• The median number of days to sell a residential property across New Zealand excluding Auckland decreased 4 days for the 11 months ending November 2020 compared to the 11 months ending November 2019 (from 36 to 32 days)
• The median number of days to sell a residential property across Auckland region decreased 8 days for the 11 months ending November 2020 compared to the 11 months ending November 2019 (from 41 to 33 days).

New Zealand

New Zealand excluding Auckland

Auckland