Looking back at how the Auckland property market changed in 2020
2020 has been a year for the record books in more ways than one. Auckland’s property market has obliterated all expectations over the last 8 months to have one of its strongest years on record.
To help give you a little perspective on just how remarkable the year’s been we’re looking back at how the Auckland property market has changed in 2020.
Median house prices hit $1 million
In the middle of a global pandemic when economists were forecasting a recession, somehow property prices in Auckland went up. In fact, in the year to November 2020, the median price in the city increased by 16.4% from $885,000 to $1,030,000, according to the Real Estate Institute of New Zealand.
What’s more, ratings agency S&P have forecasted that New Zealand will recover from the post-lockdown recession quicker than most nations. In fact, GDP is expected to increase by 6 percent in 2021, which should help drive confidence in the market.
Problems with supply VS demand worsened
The number of visitors to realestate.co.nz can be used as a barometer for housing market demand in New Zealand. In November, the site saw 1.33 million visitors – 250,000 more than during November 2019. There have also been anecdotal reports of property viewings booking out for weeks in advance during level two lockdown, when only two were allowed per day.
This sudden surge in demand could be due to a number of factors including returning Kiwis, low-interest rates, and even New Zealanders spending less money on overseas travel (and therefore getting their deposit together earlier than they expected!).
The construction industry thrived against the odds
When the COVID-19 lockdowns struck, the omens weren’t good for the construction industry. A minimum of four weeks of no building had the potential to do real damage, especially for smaller construction businesses.
Despite that, the construction industry has thrived in 2020. In fact, Statistics New Zealand data has revealed that 38,000 homes were consented in the year to October 2020 – the highest number since 1974.
This is great news for a sector that’s a key part of the Auckland and New Zealand economy, not to mention essential for the development of our city.
More of the same for the future
Many leading economists predict that Auckland house prices will continue to increase in 2021, albeit at a lower rate. ANZ has changed their LVR rules for investors and now require a 40% deposit – a change that could contribute to a slight slow down. It’s expected that interest rates will stay low and perhaps go even lower if the Reserve Bank decreases the OCR, which should have the opposite effect.
In the meantime, it’s forecasted that the construction industry will continue building at a high rate – which may help Auckland catch up with its housing shortage over the coming years.
Whatever happens, it seems very likely that Auckland homes will continue to be hot property into next year and beyond, and now could be a great time to build your dream home!
Ready to get started? Give the team at Golstruct a call to start planning a new home and take advantage of this red hot property market in 2021.