The number of houses available to buy in New Zealand hit a new record low in December, with only 12,932 properties on the market - half the amount available in December 2018.
This lack of properties is playing a large role in the skyrocketing of house prices in New Zealand.
Real Estate Institute of New Zealand (REINZ) data shows the national average house price rose nearly 19.3% to $749,000 last year.
REINZ CEO Bindi Norwell says this small property pool, plus heightened demand due to low interest rates, has lowered the average number of days it takes to sell a property to the lowest it has been since 2003, at only 27 days on the market.
“This lack of choice and high levels of confidence is also causing properties to be sold at the quickest pace we’ve seen in 17 years,” Bindi says.
“There just isn’t enough choice for people looking to purchase which has meant that there is significant pressure being placed on house prices in most parts of the country.”
The price ranges of available housing are also shrinking. The number of homes that sold for less than $500,000 across New Zealand fell from 32.1 percent in 2019 to only 19.3 percent of the market in 2020.
The number of houses that sold for over one million dollars jumped from 16.4 percent to 27.9 percent in the same year.
“Auckland city remains New Zealand’s most expensive district in the country with December seeing the city reach a new record median house price of $1,280,000. Showing how unaffordable the Auckland region is becoming – especially for first home buyers,” Bindi says.
“Today’s figures further highlight that we urgently need a combined response from Government and industry to solve the housing affordability issues the country is facing.”
REINZ data also shows that 2020 saw a spike in the amount of vacant land being purchased for development of new properties. In the first 11 months of 2020, there was $770 million more spent on vacant land than the year before - a nearly 40 percent rise.
It is still not clear what effect this will have on rents - particularly because of the freeze on rent increases last year as part of the Government’s Covid response. The rent freeze ended on September 26, and there has since been a 1 percent rise in national rent prices.