New Zealand House Prices, Sales Volumes Surged in July

WELLINGTON, New Zealand--New Zealand residential property prices and sales volumes jumped in July, likely boosted by record-low lending rates, according to market figures released Friday.

The Real Estate Institute of New Zealand said the surge in activity may not be sustained, particularly because the country's largest city, Auckland, has entered a new lockdown after local transmission of the coronavirus was detected.

The institute's house price index rose 9.4% from a year earlier in July.

The median house sale price in July increased 14.8% from the year before and sales volumes rose by nearly 25%.

Part of the rise in sales volumes can be attributed to the release of pent-up demand following the nationwide lockdown in April and May, the institute said.

"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," it said.

The Reserve Bank of New Zealand cut its cash rate to 0.25% in March and has suppressed wholesale interest rates by buying government bonds in the secondary market.

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