Records fall in ‘runaway’ housing market
Property sales in November are up nearly 30 per cent on the same time last year after an ‘‘incredible month’’ of selling.
Figures from the Real Estate Institute show 9885 properties were sold in November across the country, the highest number of properties sold in a month since March 2007. Excluding Auckland, the number of properties sold was 6127, up 18.3 per cent compared with November last year. It was the best November for volumes in 14 years.
Prices were also red-hot. Median house prices nationally rose by 18.5 per cent year on year, to a new record of $749,000 – a $24,000 increase in a month. The surprising strength of the gains has left analysts reexamining the reasons behind it.
ASB senior economist Mike Jones said sales were so much stronger than before the pandemic that it ‘‘can no longer be explained away as pent-up demand’’.
Moves were under way to help tame the runaway housing market but the demand-supply problem remained. ‘‘As a result, we remain comfortable with our view for nationwide house prices to maintain a double-digit pace through to around the end of next year.’’
Bindi Norwell, REINZ’s chief executive, said the ‘‘incredible’’ performance of the market had generated turnover not seen since before the global financial crisis.
‘‘Part of this is likely to be attributed to people wanting to purchase property ahead of Christmas, partly due to the Reserve Bank announcing in early November that it would undertake a consultation in December to re-introduce LVRs [loan-tovalue ratios] earlier than planned.
‘‘But [it is] also due to this underlying fear that prices might increase even further in the coming months,’’
Bindi Norwell Real Estate Institute
Norwell said. Median house prices were now nearly at the $750,000 mark and 11 regions had hit new highs. Price-wise, ‘‘the last time we saw these sorts of records was back in October 2003 when the market was seeing significant increases in house prices’’, she said.
Auckland was particularly strong. The number of properties sold in November rose nearly 54 per cent on last November, the highest number for a November since records began. Prices jumped 16.4 per cent to $1,030,000, a new record high, after hitting the million dollar mark in October.
‘‘For three months in a row now, Auckland sales volumes have been up more than 50 per cent when compared with the same time last year, and with a 45.8 per cent increase in new listings in November, there are few signs of the usual Christmas slow-down,’’ Norwell said.
‘‘It will be interesting to see how long these high sales volumes can be sustained,’’ Norwell said.
Excluding Auckland, house prices were slightly more modest.
They rose 15 per cent to a new median record of $615,100.
The region with the biggest price rise was Tasman, where prices were up annually by 28 per cent to $774,400. It was followed by Manawatu¯ /Whanganui (up 25.8 per cent to $503,000) and Southland (up 23.6 per cent to $395,500).
Taranaki had a 21.7 per cent rise to $496,000 and Marlborough prices rose 19.4 per cent to $585,250 year on year. Bay of Plenty was up 18.4 per cent to $753,000 and the red-hot Wellington
market was up 14.5 per cent to $790,000. Waikato rose 13.2 per cent to $670,000 and Canterbury jumped 13.1 per cent to $526,000.
Jones said it was clear South Island housing markets tended to underperform the national average, which likely reflected their exposure to tourism and a more flexible supply of housing. Looking ahead, he said several factors could take steam off the housing market, including the re-introduction of LVRs, and government pressure on the Reserve Bank to address housing affordability. Several banks had also dampened expectations of negative interest rates next year.
‘‘There are few signs of the usual Christmas slow-down.’’
A billion-dollar deal for the Morrison government to buy more than 50 million doses of the University of Queensland’s potential coronavirus vaccine has been abruptly terminated after several trial participants returned false positive HIV test results.
UQ, working in partnership with Australian global biotech company CSL, will abandon its current clinical trials following the discovery. It informed the federal government of the initial data on Monday, which was then referred to health authorities for urgent medical advice.
Sources with knowledge of the current trials said pathology tests had in the past weeks confirmed the positives were in fact false and the health of the participants has not been put at risk.
Prime Minister Scott Morrison said the national security committee of cabinet agreed to terminate the purchasing agreement on Thursday, following expert health advice and fears the revelation would severely damage the Australian public’s confidence in the Covid-19 vaccination programme, which is expected to begin early next year.
‘‘We have prepared for this. We have planned for this. And now we’re making decisions in accordance with this,’’ he said yesterday.
He said the government had ‘‘spread the risk’’ by entering into multiple agreements and had secured 20 million new doses from Oxford UniversityAstraZeneca and another 11 million from Novavax to cover for the 51 million doses the homegrown product was to supply.
‘‘The net out-take of this is we are more likely to have the entire population vaccinated earlier rather than later by the ability to bring this manufacturing capability forward,’’ Morrison said.
The UQ vaccine candidate used a protein and adjuvant platform, containing the Covid-19 spike protein and a ‘‘molecular clamp’’. A small component is derived from the human immunodeficiency virus, known as HIV, that is not able to infect people or replicate.
A source with knowledge of the clinical results said although the HIV protein fragment posed ‘‘absolutely no health risk to people’’, they had identified that some trial participants who received the vaccine produced a partial antibody response to it.
The partial antibody response had the potential to interfere with some HIV screening tests that look for the antibodies – leading to a false positive test result. It is unclear how long participants would continue to return false positive results. The source said although all participants had been told there was a remote possibility HIV markers could be found in tests during the trial, medical researchers had not expected it to occur.
Health department secretary Brendan Murphy said the risk of a false positive was seen to be ‘‘extremely low at the outset’’.
‘‘Everyone was very surprised at the unexpected prevalence of the false positive,’’ Murphy said.
More than 200 volunteers in two groups – aged 18 to 55, and 56 and over – were involved in the phase one trial with a proportion of the participants receiving a placebo.
Evidence publicly released so far from the clinical trials found the vaccine to be safe and said it produced a strong immune response able to neutralise the Covid-19 virus in laboratorybased tests.
A government source said the Australian government’s Science and Industry Technical Advisory Group, headed by Murphy and acting Chief Medical Officer Paul Kelly, had reviewed the findings this week and recommended ending the deal.
An industry source said CSL, Australia’s biggest company, was to make a statement to the ASX 200 yesterday before the market opened. Both UQ and CSL will continue their research in the hope of creating a successful vaccine in coming months.
Neither CSL, the University of Queensland nor the Morrison government would comment when contacted by this masthead.
Vaccines typically require years of research and testing before reaching the clinic, but scientists around the world are racing to produce a safe and effective coronavirus vaccine by next year.
Health Minister Greg Hunt said the decision showed the planning process was working.
‘‘It’s an honest explanation of some of the challenges we’ve had,’’ Hunt said. ‘‘But, at the end of the day, 31 million new vaccines purchased for Australia, and the potential for a slightly earlier completion of the rollout with the commencement process still on track for March, subject to the approvals and the news on our vaccine candidates is strong.’’
The University of Queensland was tasked by the Oslo-based Coalition for Epidemic Preparedness Innovations to develop a vaccine against the coronavirus in January, which was supported by an initial investment of up to US$4.5 million (NZ$6.3m).
The vaccine efforts reached a critical milestone in April, showing the ability to raise high levels of antibodies that can neutralise the virus in early pre-clinical testing.
Although the deal with CSL was expected to be worth up to $1 billion, the federal government was not required to pay unless the vaccine had received the green light from health authorities and large-scale production occurred. It means the funding commitment can be diverted to securing doses from other candidate vaccines.