March Market Report 2021
28 Apr 2021, Harcourts Admin
For many businesses, the end of March signifies the end of another financial year. This in turn tends to trigger intense activity in the real estate industry across the country. When this extra interest and activity coincides with a galloping real estate market, like the one we are currently experiencing, the latest market figures make for astonishing reading. Remember that these latest results were achieved prior to recent moves by the Government in an attempt to slow down the New Zealand housing market. So, any “hoped for” effect that the Government’s moves might look to achieve have not been factored into these March statistics.
Following on from the strong listings in February, Harcourts had another huge month of bringing new property to the market. In fact, March was the second biggest listing month in the last 4-5 years. Having a rush of new properties available to purchase has been great for all the buyers out there in the market. With the result being that Harcourts settling 665 property transactions. We must go back to 2007 to find a month with more sales activity than this.
The most recent REINZ data is led by a compelling headline, “Highest number of properties sold in a March for 14 years.” For all the reasons that are well known to everyone, the market across the country literally took off again over March. The statistics nationally and locally will not make welcome reading for the Government or people looking to purchase in the current climate. Here in Christchurch the figures are equally strong. Overall, there were 918 recorded sales for March. This number is up some 40% compared to March a year ago, and remember March 2020 was at 95% of pre lockdown figures.
The median sale price reported for Christchurch is now $600,000, obviously also a new high and up 20% on a year ago. The reported Days on The Market is down to 24 days, a new low and we all know the market is moving at a fast rate.
Other market information that makes interesting reading is that for the first time over one-third of all properties sold nationally were sold by auction. There is no doubt that the market locally and nationally has favored this method of sale to achieve the best possible outcome for everyone involved.
While this market information relates to March, you will be aware that in the last week of March the Government announced new measures that they hope will slow the activity and rapid price growth in the market. The range of measures are aimed primarily at what they call the investor end of the market. The main measures introduced that will cause a potential rethink in this sector of the market are the removal of the ability of landlords to claim their interest payments against the income generated by their proper-ties and the extension of the Brightline test to 10 years.
These measures will certainly cause a few investors, or individuals, to rethink their strategy. The extension of the Brightline test, while being nothing more than a quasi-capital gains tax, will not have a huge effect on a person with a genuine “purchasing a property for my retirement” attitude.
The removal of the tax deductibility status will influence some investors however, particularly those that are highly leveraged. The current rapid gains may slow down, and we are seeing signs of that, as buyers look to take a breath. But equally I expect them to get a second wind sometime. If investors pull back a bit, it will only make life easier for the home buyer.
There you have it, if you need any additional property information or guidance don’t hesitate to speak to a Harcourts gold consultant.