It seems everyone wants a piece of the Southland property market right now. 

Southland has just recorded its highest sales count for a December month in the last 14 years, with sales volumes increasing 25.5% year-on-year from 157 in December 2019 to 197 in December 2020. 

Real Estate Institute of New Zealand CEO Bindi Norwell said the strength of the market locally saw Southland have the highest increase in house price values for the South Island with a “15.7% increase in the HPI year on-year”.

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Despite record growth, Norwell said the market had in fact remained “relatively steady over the last few months”.

Median house prices in Southland increased by 13.6% year-on-year to $375,000 in December 2020, up from $330,000 in December 2019, according to the latest Real Estate Institute of New Zealand (REINZ) property data.

In Invercargill city, property prices increased from $330,000 in December 2019, growing to $400,000 in November 2020, then taking a slight dip to $377,000 in December 2020, but still showing signs of huge growth from this same time last year. 

Listings also increased in Southland by 23.2% annually, with 170 new properties coming to the market in December.

Days to sell increased 1 day compared to December last year.

However, recent high sales volumes have resulted in inventory decreasing -19.7% year-on-year to the lowest level on record, only fuelling demand further.

Low inventory coupled with spiking demand is a nation-wide problem, Norwell said.

She said the lack of properties for sale was putting pressure on house prices and speeding up sales.

“Currently we have half the inventory levels we had back in December 2018. Therefore, there just isn’t enough choice for people looking to purchase, which has meant that there is significant pressure being placed on house prices in most parts of the country,” she said.

Southland, along with every other region – except Auckland and Gisborne – had their lowest levels of inventory ever.

The total number of properties available for sale in New Zealand decreased by -29.1% in December to 12,932.

“When you add into the equation the fact that there are record low interest rates, it means that people are more willing to compete to secure the property they want,” continued Norwell.

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The median house prices across New Zealand also increased by 19.3% from $628,000 in December 2019 to a new record median price of $749,000 in December 2020.

The number of residential properties sold in December 2020 across New Zealand increased by 36.6% from December 2019 (from 6,543 to 8,935) – the highest number of properties sold in a December month ever. 

“This lack of choice and high levels of confidence is also causing properties to be sold at the quickest pace we’ve seen in 17 years,” she said.

She warned that urgent intervention is needed to ensure house prices don’t continue to escalate.

“Today’s figures further highlight that we urgently need a combined response from Government and industry to solve the housing affordability issues the country is facing,” said Norwell.

“If 2020 taught us anything, it was that the unusual can happen. Looking at December’s sales data again proves this point, as we saw the highest number of properties sold in a December month since REINZ began keeping records,” she said.