housing market

What recession? Our unstoppable housing market marches on | NEW ZEALAND

PHOTO: (IMAGE: TINA TILLER) NZ housing

New Zealand’s housing market is going ballistic, defying economic forecasts and historic trends. Michael Andrew asks the experts what’s causing the clamour and what it means long term.

Six months after Covid-19 first reached our shores, New Zealand’s economy has officially moved into recession. GDP is down 12.2% – the largest drop on record – spending activity has slumped, unemployment is rising, and our hospitality and tourism industries have been decimated by two lockdowns and a world slowed down to a sickly limp.

It’s a once-in-a-century tempest that is foundering almost every single ship in its path, and slowly making many of us poorer. And yet, in the midst of it all, perfectly robust and sailing along at a rate of knots, is New Zealand’s apparently unsinkable housing market – enjoying some record-breaking spikes.

Everyone seems to have a similar version of the story that goes something like this: a neighbour or friend recently listed a house for $1m, 80 couples came to the open home, and it sold for $1.2m cash a few days later.

The anecdotes are everywhere, but what does the data say? According to Reinz, last month’s median house price across New Zealand increased by 16.4% from the same time last year to $675,000 – up from $580,000 in August 2019 and up from $659,000 in July.

In Auckland, median house price increased by a record 16% to $950,000 from $819,000 at the same time last year, and up from $918,097 in July this year.