PHOTO: Jen Baird Chief Executive of REINZ
The number of properties sold for one-million-dollars or more during the first half of 2021 increased by 167.9% compared to the first half of 2020, with 14,776 million-dollar plus properties sold (up from 5,516 in 2020) according to the Real Estate Institute of New Zealand’s (REINZ) Million Dollar Price Report.
Jen Baird Chief Executive of REINZ says “This is a significant change even though the first half of 2020 was impacted by the COVID-19 lockdown across the country. The volume of properties sold over a million dollars is reflective of a property market that has seen 28.7% median price growth in the 12 months to the end of June 2021.”
Taking a two-year view back to the first 6 months of 2019, the number of million-dollar-plus properties sold nationally tripled, increasing 200.9% from 4,910.
For New Zealand excluding Auckland, the number of million-dollar-plus properties sold increased 231.1% annually (4,798 up from 1,449 –3,349 more properties).
In Auckland, the number of million-dollar-plus properties sold during the first half of 2021 increased 145.3% when compared to the previous year (9,977 up from 4,067) – the largest annual percentage increase for the Auckland region since 1994.
Jen Baird, Chief Executive at REINZ says: “Auckland drives the largest volume of million-dollar-plus sales, increasing 145.3% year-on-year – an expected, albeit large jump as the Auckland median now sits comfortably above the million-dollar mark.
“Nationally, we are seeing the same trend off a lower base with considerable percentage increases in the number of million-dollar-plus properties selling. We continue to see the demand and supply imbalance putting upward pressure on prices, resulting in an increase in million-dollar-plus sales in every region,” continues Baird.
“For the first time, every region has had a seven-figure sale, with the West Coast joining the club in June 2021.
“The top end of the market has seen the knock-on effect of these price increases, seeing a 214.5% increase in the $3 million-plus category and a 205.4% increase in the $5 million-plus category nationally,” says Baird.
“Given that the first half of 2020 was impacted by COVID-19, it is interesting to look at the 2021 numbers in comparison to the first half of 2019. When doing so, we see that the number of million-dollar-plus properties sold nationally increased 200.9%, the number of $3-million-plus properties sold increased 321.2%, and the number of $5-million-plus properties sold increased 334.6%. These figures clearly show the ongoing strength of the property market,” concludes Baird.
The region with the biggest annual percentage increase in the number of million-dollar-plus properties sold was Marlborough, with a 437.5% increase from the first half of 2020 (43 properties up from 8).
However, it is important to note that these percentage increases appear large due to the small sample sizes.
All 16 regions saw year-on-year increases in the number of million-dollar-plus properties sold in the first half of 2021. Every region also saw a record number of sales in the million-dollar-plus bracket, including the West Coast, which had its first million-dollar-plus sale in June 2021.
Regions with the strongest percentage increases in the number of million-dollar-plus sales from the first half of 2020 to the first half of 2021, in addition to Marlborough, were:
- Southland: +400.0% (from 2 to 10 properties – an additional 8 properties)
- Waikato: +379.9% (from 164 to 787 properties – an additional 623 properties)
- Manawatu/Wanganui: +376.9% (from 13 to 62 properties – an additional 49 properties)
When looking at the number of properties sold for $3-million-plus in the first half of 2021, Canterbury saw the largest percentage increase, growing from 2 properties in the first half of 2020, to 18 properties in the first half of 2021 (an 800% increase year-on-year – a reminder that these percentage increases appear inflated due to the low sample size).
Other regions that saw an increase in the $3-million-plus category were:
- Bay of Plenty: +525.0% (from 4 to 25 properties – an additional 21 properties)
- Auckland: +207.3% (from 192 to 590 properties – an additional 398 properties)
- Hawke’s Bay: +200.0% (from 1 to 3 properties – an additional 2 properties)
- Otago: +200.0% (from 12 to 36 properties – an additional 24 properties)
- Waikato: +166.7% (from 3 to 8 properties – an additional 5 properties)
- Wellington: +71.4% (from 7 to 12 properties – an additional 5 properties).
Jen Baird says: “There are a number of factors that have led to the rise of million-dollar-plus properties sold across the country, most notably the ongoing high levels of demand for property combined with the continued slow pace of new listings coming to the market for sale. We have also had a low interest rate environment for some time, and we see continued investment in the regions. Regardless of the price bracket, these factors directly impact, lifting the overall market.
“While this is yet another data point showing prices have increased, there are a number of supply side initiatives that are likely to impact the market in the medium-term including record high levels of building consents and the Housing Acceleration Fund investment. On the demand side, the return of LVRs in March and May have seen investors take stock and economists are expecting interest rates to rise later this year. As these changes start to play out, we would expect to see the rate of house price growth begin to slow across the country,” concludes Baird.
Table 1: Number of million-dollar plus properties sold in NZ for the first six months of 2020 v first six months of 2021
|Region||$1m + sales H1 2020||$1m+ sales H1 2021||% change||$3m + sales H1 2020||$3m + sales H1 2021||% change||$5m + sales H1|
|$5m + sales H1|
|Bay of Plenty||240||823||242.9%||4||25||525.0%||–||5||–|