Despite predictions that the housing market would take a hit post-COVID-19, house prices and sales volumes have picked up in Southland, as well as across the country.

The latest property figures for July are out from the Real Estate Institute of New Zealand (REINZ) and it shows confidence for the time being in the housing market, however, it remains unclear whether the strength in the market will hold through the second half of the year. 

Median house prices across New Zealand increased by 14.8% in July to $660,000, up from $575,000 in July 2019.

The Southland median house price increased 20.5% year on year, to reach $358,000, with the Invercargill city median price rising 21.1% to a record $369,500.

REINZ Chief Executive Bindi Norwell said the increased prices were likely due to an increase in the number of houses sold in the $500,000+ price bracket. 

There were also slightly fewer first home buyers and investors in the Southland market compared to last month.

She said projects such as the Invercargill city centre redevelopment would likely be attracting new interest into the region, but the closure of the Tiwai Point Aluminium Smelter could be a concern for some investors as more than 2000 jobs could be lost in the region.

Ms Norwell said the absence of international students attending the Southern Institute of Technology due to COVID-19 restrictions would also likely influence the property market in the coming months. 

"It will be interesting to see how the market will perform for the remainder of 2020," she said. 

The number of properties available for sale in Southland increased by 10.3%, despite the national inventory levels during July decreasing by 10% from this time last year. 

Southland also recorded the second-lowest median days to sell in July, at just 28 days on the market.

Ms Norwell said to have so many regions with a median number of days to sell below the 40 mark in a July month was extremely unusual, showing just how quickly the market was recovering from lockdown. 

"As we move closer to the election and as more unfolds with the latest COVID outbreak, we would expect this to slow down a bit. However, with the market appearing to do the exact opposite of what was predicted, time will tell what happens with days to sell."

The number of residential properties sold in July across New Zealand increased by 24.6%. The numbers increased from 6303 to 7854 – the highest number of properties sold in a July month for five years, according to REINZ.

"Part of the sales volumes can be attributed to post-COVID pent up demand; but underpinning this activity during July was strong levels of interest and engagement from all buyer levels including first home buyers, investors and families looking to upgrade their property,” she said.

Even Queenstown-Lakes district is defying expectations. 

"[The area] everyone predicted would be one of the most hard-hit regions, due to a lack of international tourists, saw a record median price for the district in July of $1,100,000 up from the prior record set in March 2020 of $1,080,000," Ms Norwell said. 

“Economist and property experts across the country will be keeping an even closer eye on the housing market now we’ve moved back up the Alert Level system. If the same pattern occurs as did during the last lockdown, we expect to see prices hold again post lockdown – although time will tell,” she said.

In July, Southland also had the second-highest annual growth rate of 13.2% to an index level of 3429. The REINZ House Price Index (HPI) shows underlying value in the market is holding.