COVID-19 will have a dramatic effect on the New Zealand property market, but not in the way many people expected. While prices are sky high and heated city markets remain under pressure, internal migration may be a surprise new force shaping the future movement of people and prices across the country. More Kiwis are ready to cross the Cook Strait looking for greener pastures, as South Islanders look north for new opportunities and North Islanders look south for clean air and a fresh start. There are many factors influencing this interest, including a sharp rise in remote work opportunities due to the global pandemic.
According to new data from Realestate.co.nz, there has been a big increase in the number of New Zealanders peeking over the fence. Over the 90 day period from September 9 to December 7, 169,813 North Islanders searched for property in the South Island. That’s a huge 30% increase compared to the year before, with the global pandemic obviously influencing the change. Interest from South Islanders looking to head north was even greater. According to the data, 80,064 South Island users conducted a specific search for property in the North Island, which is a massive 46.13% increase on the same time last year.
As you might expect, Auckland residents are the most interested in South Island digs, with searches up by 30.59%. Other northern regions were not far behind, however, with interest from Waikato and Wellington up 25.09% and 16.46% respectively. The most popular South Island regions with people from Auckland and Waikato were Canterbury, followed by Central Otago/Lakes District, and Otago. For Wellington residents, Central Otago/Lakes District was the most attractive region, followed by Marlborough and Canterbury. Going the other way, South Island residents were mostly attracted to Wellington, followed by Auckland, Manawatu/Wanganui, and Waikato.
According to Realestate.co.nz spokesperson Vanessa Taylor, there are many reasons for this cross-strait interest, including a growing desire for lifestyle changes, and a rise in remote working: "Being able to work remotely used to be a privilege, and a novelty, in many workplaces, but - thanks to the Covid prompted lockdown - that has changed and it is becoming the norm... In turn, that is prompting many people to reassess... Many may be realising they could pay half the mortgage as currently, be closer to family, and still able to work in a good job, possibly remotely, if they were based out of Auckland or Wellington - and so they have been looking around the country.”
Property prices in New Zealand remain very healthy, with strong growth recorded in all major districts according to data from the REINZ House Price Index (HPI). Price growth ranged from 5.4% in Christchurch to 14.7% in Palmerston North over the last quarter, with 10 of 24 cities or districts recording double digit growth over three months from September to November. Property prices rose by 8.9% in Auckland over the quarter and 16.2% for the year, with Wellington prices growing by 12.6% and 18.7%, and Christchurch growing by 5.4% and 10.1% respectively. Overall, the median national house price in New Zealand is $749,000, up 3.3% since last month. The median price in Auckland remains over one million at $1,030,000, and the rest of the nation sits at $615,100. If rising internal migration becomes a reality, we could see less divergence between prices in major cities and regional areas.