House prices were up 13.77% y-o-y in Q3 2020
New Zealand’s house prices continue to rise strongly, as the impact of the ban on non-resident foreign homebuyers wanes. Median house prices rose by 13.77% (inflation-adjusted) during the year to Q3 2020, following y-o-y rises of 7.67% in Q2 2020, 10.87% in Q1 2020, 10.28% in Q4 2019, and 5.82% in Q3 2019. On a quarterly basis, real house prices increased strongly by 7.11% in Q3 2020.
Demand surging, supply falling
Despite the COVID-19 pandemic and the subsequent lockdowns, demand is rising strongly. Property sales in New Zealand soared 25% y-o-y to 8,830 units in October 2020, the highest number of properties sold since May 2016, according to the Real Estate Institute of New Zealand (REINZ). In Auckland, the number of properties sold in October rose strongly by 50.1% y-o-y to 3,140 units. For New Zealand excluding Auckland, property sales also increased 14.2% y-o-y to 5,690 units over the same period.
In contrast, the number of properties available for sale fell by 18.7% to 18,141 units in October 2020 from a year earlier.
Rents, rental yields: Good yields at 5.48%
Apartment costs in Auckland are around $7,209 per sq. m.
|New Zealand: typical city centre apartment buying price, monthly rent (120 sq. m)|
|Buying price||Rate per month||Yield|
Recent news: For the last six years New Zealand's economy’s performance has been robust, with growth of 2.2% in 2019, 3.2% in 2018, 3.8% in 2017, 4.2% in 2016, 4.1% in 2015 and 3.2% in 2014. However, the economy is now projected to plunge by 6.1% this year, according to IMF projections, as the effect of lockdowns and travel restrictions associated with the COVID-19 pandemic hits.
In November 2020, the Reserve Bank of New Zealand (RBNZ) kept its Official Cash Rate (OCR) unchanged after cutting it by 75 basis points in March 2020 to a historic low of 0.25% in emergency decision after the outlook for the economy had deteriorated significantly as a result of the impacts of the coronavirus outbreak.