Southland median house prices rose in May, allowing the region’s real estate market to retain its reputation as the best performer over the past 12 months, according to new Real Estate Institute of New Zealand market commentary.

Southland had the highest annual growth rate in value on the house price index, and the lowest number of days to sell, of all regions, at 50 days (up 18 days from the same time last year).

That’s despite Southland clocking in as the third worst performer in sale volumes in May.

All regions have suffered from a drop in sales since COVID-19 restrictions took effect in late March but four South Island regions took the biggest hit to annual sales volumes in May.

They were Tasman (down 62.5%, from 80 to 30 – 50 fewer houses), Otago ( down 56.2% from 479 to 210 – 269 fewer houses), Southland (down 54.8% from 210 to 95 – 115 fewer houses) and Marlborough ( down 54.3% from 105 to 48 – 57 fewer houses).

However, Southland’s median price in May was $345,000, up from $307,000 (12.4%) in April and $281,000 (22.8%) in May last year.

There were 95 sales in May, compared with 12 in April and 210 in May last year.

The Southland real estate district comprises the Invercargill, Gore and Southland territorial districts, with Invercargill city performing strongly.

The majority of homes sold were in Invercargill city: 63 in May, compared with 6 in April and 138 in May last year).

The median price in Invercargill city was $351,038, compared with $265,000 in April and $281,500 in May last year.

Real Estate Industry of New Zealand board member and Southland commentator Gail Hudson agreed the data was the kind of news Southlanders would like to hear.

“I don’t see why not! Southlanders want to be positive about their towns and there’s no reason for them not to be... I imagine, and time will tell... a lot of people may want to move to Southland,” Mrs Hudson told the Southland App.

Mrs Hudson said markets in Gore and Winton were also busier.

A mix of people were out looking for Southland property, ranging from families who were changing size, to investors, and people who wanted to move south, she said.

“For some time, it has been a really good place to buy. And the rental returns are quite good as well,” she said.   

The institute’s report said Southland’s median price trend had been increasing for many years.

“A particularly strong performance over the past year [has been] tempered somewhat over the last couple of months. 

“The trend in sales volume is starting to show the inevitable effects of [COVID-19] lockdown. 

“The days to sell median had a significant jump due to properties selling in May that were listed prior to lockdown,” the report said.

Nationally, the real estate market showed some signs of recovery in May but the effects of the COVID-19 pandemic response was still making its presence felt, institute chief executive Bindi Norwell said.

The institute’s national data showed underlying value had not fundamentally fallen during May, with only minor decreases from April.

The number of properties sold in May across New Zealand decreased by 46.6% from the same time last year – from 7477 to 3990 – as COVID-19 Alert Level 3 restrictions made it difficult to sell property.

The sales volume drop was not surprising given the restrictions on property viewings, Ms Norwell said.

There was still a shortage of new listings, which would continue to impact sales volumes, but Ms Norwell hoped that would change as people’s confidence started to lift.

The total number of properties available for sale nationally decreased by -19.1% in May to 20,940 down from 25,895 in May 2019 – a decrease of 4955 properties compared to 12 months ago and the lowest level of inventory for the month of May since records began.