House prices were up 7.67% y-o-y in Q2 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 7.67% (inflation-adjusted) during the year to Q2 2020, following y-o-y rises of 10.87% in Q1 2020, 10.28% in Q4 2019, 5.82% in Q3, and 2.74% in Q2. Yet on a quarterly basis, real house prices fell by 3.45% in Q2 2020.
Demand surging, supply falling
Despite the COVID-19 pandemic and the subsequent lockdowns, demand is rising strongly. Property sales in New Zealand soared 24.6% y-o-y to 7,854 units in July 2020, the highest level recorded in a month of July for 5 years, according to the Real Estate Institute of New Zealand (REINZ). In Auckland, the number of properties sold in July rose strongly by 30.3% y-o-y to 2,596 units. For New Zealand excluding Auckland, property sales also increased 21.5% y-o-y to 5,258 units over the same period.
In contrast, the number of properties available for sale fell by 11% to 19,441 units in July 2020 from a year earlier – the lowest level of inventory for the month of July since records began.
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 as much as 7.2% this year, as the effect of lockdowns and travel restrictions associated with the COVID-19 pandemic hits, based on IMF projections.
In August 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.