House prices defy Level 4
The region's gravity-defying housing market continues to rise in defiance of the Level 4 lockdown, latest data shows.
Statistics from the Real Estate Institute shows the region's median house sale price for August was $500,000 — up 8.7 percent on the same month last year.
That was also $100,000 up on April 2020, which was also a Level 4 month when only nine sales were completed.
“A sense of uncertainty has been felt in Gisborne's market brought about by the recent Covid-19 Alert Level 4 lockdown,” REINZ regional director Neville Falconer said.
“Low levels of stock continue to be an issue for the region, with just six weeks of inventory available to prospective purchasers.
“However, stock has increased 21.4 percent annually — the only region to see an increase for the fifth consecutive month.”
Inventory last month increased from 56 to 68 properties.
“In August, Gisborne experienced the lowest number of properties sold — 22 — since the last Covid-19 Alert Level 4-affected months.
Prior to lockdown, Gisborne's market was tracking as expected coming into the warmer months.
“Buyer inquiry has remained strong throughout the lockdown due to demand outweighing supply and it is expected that with the arrival of spring and easing of alert levels in the region, there should be lift in activity in the market.”
The region's pre-lockdown median in July was $625,000.
“There were only two weeks in the month of August that real estate was fully operational,” Bayleys Gisborne director Simon Bousfield said.
“The only Bayleys auction date held in the month was done so virtually on the 27th. These statistics prove that after the 2020 lockdown we were well prepared to do business from home, managing to still list and sell property remotely, and that clients and customers also had the confidence to compete from the comforts of their home.
“The market continues to perform well, with healthy buyer competition and the expected increase of listings as we head into spring.
“There are a variety of options — from good sections to a range of quality Gisborne homes — that will continue to keep the market, both local and national, very engaged.
“Under Alert Level 2 we have implemented the necessary restrictions in order to keep our clients and staff safe.
“Social distance measures are in place for auctions, plus all hygiene precautions, and our agents are equipped with all the essentials required to hold open homes safely and without risk to those attending.”
Property Brokers Gisborne branch manager Stefan McNeely said the lockdown property market was one of "mixed emotions" with some choosing to delay marketing properties until open homes were allowed
Buyers on the other hand, has shown more urgency to purchase "hence the success of being able to do online auctions achieving premium prices".
"The only challenge was the declining numbers of new listings coming to the market during August which we are starting to see a rapid increase in the number of listings coming to the market this month.
"We will continue to see house prices increasing because of the urgency from buyers to purchase due to the looming changes in borrowing, interest rates and not enough houses coming to the market to cater for the demand.
"We think everyone was better prepared this time compared to our last lockdown and we had a very busy time enjoying working from home with lots of team meetings via our online platform both business and social.
"We also introduced our new auction platform, so we can operate regardless of the levels or restrictions in the future."
REINZ data shows 12 sales were made between the start of August and Alert Level 4 on August 17, with 10 sales made over the rest of the month, all covered by Level 4 lockdown.
A REINZ spokeswoman pointed out Gisborne actually experienced an increase the average number of sales a day over the Level 4 lockdown period, rising from an average of 0.70 sales prior to 0.71.
“It is important to note that with such a small sample size that it is hard to get a full grasp on the numbers here but if anything, it goes to show that Gisborne did not come to a grinding halt the second it hit lockdown.”
Median prices for residential property across New Zealand increased by 25.5 percent from $677,400 in August 2020 to a record $850,000 for August 2021.
Some economists were also surprised by the nation's housing market.
“House prices, according to the REINZ House Price Index (HPI), still managed to climb a whole 2 percent in the month,” Kiwi Bank chief economist Jarrod Kerr said.
“On an annual basis, house price growth hit a new all-time high of 31.1 percent across Aotearoa.
“At present, house prices appear impervious to anything thrown at them.
“Withstanding policy tightening so far this year and now the start of a lockdown, house prices continue to defy gravity.”