Median price up, but there may be more opportunity for first home buyers.
According to the latest Trade Me Property Index, the national average asking price for homes in New Zealand hit a new record-high in March 2021 – exceeding $805,000 for the first time.
Trade Me Property sales director Gavin Lloyd states “As we have seen consistently over the past few months, demand outweighed supply in March, putting pressure on the market and resulting in ongoing price increases,”. The demand nationwide has also increased by 26%, year on year, while supply falls by 9%, according to the latest Trade Me Property Index.
Property values rose rapidly through the first quarter of 2021, while sales activity stayed high despite record-low listings. However, Property data company CoreLogic Market Update suggests that the shortage of listings for the first quarter of this year could change.
The report says, “Theory would tell you that listings may start to rise over the coming months as more would-be sellers (e.g., investors) react to previous strong capital gains and look to lock in their profits,”.
The cool off in the property market can be seen as auctions take some breather in early April compared to March 2021, possibly due to changes released by the government to the tax treatment of residential investment property.
The staggering rise in property prices has undoubtedly indicated widespread concerns about housing affordability. Though this is expected to change over the coming months with the game changing new housing policies and re-introduction of LVR rules which may unwind the property prices in a tidy manner, to avoid any sudden change in house price dynamics.
Sarah Wood, CEO of realestate.co.nz. says New Zealand’s “12 of our 19 regions saw a lift in new listings last month compared to March 2020”. Though the market is booming the supply is expected to increase through these predictions, giving prospective buyers more options in the market.
Last month Auckland remained at the top, with the average asking price hitting a striking $1,047,450 – a 10% increase on the same month last year. Compared to the previous year, demand in the Auckland region also increased by 21% in the last month. Meanwhile, supply also increased by 7%.
As the months pass, tighter LVRs on their own would be expected to slow demand from investors, offering opportunity and room of choice for first home buyers.
In addition, CoreLogic’s chief property economist Kelvin Davidson says, “property market slowdown is likely to occur in the second half of 2021- the Government changes just reinforce that”.
Reports show that we have recovered from Covid-19 strongly and although the housing prices are on the rise all over New Zealand, we have become a poster child for the property boom and good things are not far.
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