DEAR PROPERTY OWNER ,
Our 44th edition of Ray White Now welcomes us to uncertain times given that , as a country , we are currently at varied Alert Levels across New Zealand .
Before the changes to the Alert Levels , the New Zealand property market was continuing to make significant progress . Price increases across many regions continued to be strengthened , while the capital city areas were showing less gain but were still remarkably strong compared to previous years .
The gains in prices over the last 12 months have been extraordinary . Nationally the median house price has risen by 25.2 per cent to $ 826,000 , a record across New Zealand property . When we look at property prices , they ’ ve increased by 23.3 per cent from $ 557,500 in August last year to a new record of $ 687,500 in August this year .
The Reserve Bank had their monetary policy statement on 18 August , in which they decided to keep interest rates on hold mainly due to the COVID-19 announcements the day before . The current Official Cash Rate is 0.25 per cent , which has been at that level since March 2020 , when there was a significant drop of 0.75 per cent due to the initial COVID-19 outbreak . This was designed to stimulate the market and was a response to a time when the Bank was unsure of the consequences of the pandemic .
While house prices are an important consideration for interest-rate movements , sustainability also plays a role in how the Reserve Bank sets its monetary policy decisions . One of the more connected aspects of the Official Cash Rate is the Consumer Price Index , which has risen to its highest level since mid-2011 at 3.3 per cent . This inflationary effect is an additional burden on the economy and is higher than the inflation target range set over the medium term .
The shortage of properties available for sale is of continuing concern , with the industry having its lowest inventory level ever . The total number of properties available for sale in New Zealand decreased by 31.9 per cent in August 12,249 , down from 19,441 in August 2020 – 7,192 fewer properties compared to 12 months ago . This is the lowest level of inventory we ’ ve ever seen in New Zealand ( surpassing the previous record low set in December 2020 at 12,932 ). For the fourth month in a row , only one region saw an annual uplift in inventory levels - Gisborne , with a 21.4 per cent increase in inventory levels from the same time last year . We will look in more detail at how inventory puts pressure on prices and the overall impact of a lessening inventory portfolio for sellers .
New Zealand ’ s Consumers Price Index ( CPI )
In regard to our Ray White portfolio , we are currently holding 2,911 properties for sale . This is 18.87 per cent down on the same time last