Well, here we are mid-way through February and mid-way through the first quarter of 2020.
Figures have just been released by the REINZ for January 2020, and 10 out of 16 regions across New Zealand have seen an annual increase in the number of properties sold. In January 2020, property sales have increased by 3.2% compared to the same period last year. Nation-wide averages show that this has been the busiest January in 4 years.
This supports the current general feeling in the market at the moment where the demand for properties is surpassing supply. Buyers are aware that they need to move quickly on properties, particularly in high demand areas.
Confidence in the housing market is growing, and sales are being driven by a number of factors, including a relatively strong economy, good employment rates, and low interest rates.
These factors have also meant we’ve seen more first time buyers in the market. This pushes up the lower end of the market, which then has the flow on effect of lifting the overall market. With first home buyers more active, it then helps our previous first home owners upgrade to their next home helping to keep the mid-market busy. NZ wide, there has also been a recent increase in the number of multi-million dollar properties sold, showing that this has an impact at the higher end of the market too.
Looking more specifically at the market in Canterbury, there was an 8.1% increase in the median house price for the year from January 2019 – 2020. The median house price recorded an equal high of $465,000. This sits alongside a 4.8% increase in the actual number of properties sold during the same period. Furthermore, January 2020 saw the most sales in the month of January in Canterbury since 2008.
The HPI in Canterbury continues to fluctuate, with only a small percentage of growth over the past 12 months. Although it is increasing slowly, Canterbury does have the lowest percentage of movement compared to all other regions in New Zealand.
In my opinion, the reason behind this is the extent to which Christchurch continues to expand. This is evident in the number of new housing options available and the attractiveness of these to first home buyers. You don’t have to look far to see new subdivisions still popping up in all directions around the outskirts of the city. Historically, this could actually lead to a drop in the HPI. However, our HPI remains in this positive, albeit, small growth period. I believe this is a good thing.
Here at Najib, we have noticed investors coming back to the market, in particular investors from Auckland and Wellington. In Christchurch there is the opportunity to get a higher yield on investment. And I predict that during the next 5 to 10 years as our city comes back to ‘normal’, they will also benefit from a positive capital gain.