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Wellington house prices keep rising – median up 20.8% in 12 months

News from REINZ
Median house prices across New Zealand increased by 19.8% from $605,000 in October 2019 to a new record median high of $725,000 in October 2020; and up from $689,000 in September this year (a 5.2% lift) according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand.

In Wellington, there was a 20.8% increase from $650,000 in October last year to a record $785,000 this October. The Lower Hutt median is now $761,000.

Median house prices for New Zealand excluding Auckland increased by 15.4% from $520,000 in October last year to a new record median price of $600,000, and up from $585,000 in September this year (a 2.6% increase).

Additionally, Auckland’s median house price increased by 16.3% from $860,000 at the same time last year to $1,000,000a new record high, and up from $955,000 in September this year (a 4.7% increase).

In total 10 regions saw record median prices during October. Regions in addition to Auckland with record median prices were:

•Gisborne with a 34.1% increase from $425,000 in October last year to $570,000 this October
•Marlborough with a 26.8% increase from $445,500 in October last year to $565,000 this October
•Otago with a 22.7% increase from $532,000 in October last year to $652,500 this October
•Wellington with a 20.8% increase from $650,000 in October last year to $785,000 this October
•Manawatu/Wanganui with a 17.5% increase from $400,000 in October last year to $470,000 this October
•Northland with a 16.5% increase from $515,000 in October last year to $600,000 this October
•Bay of Plenty with a 16.2% increase from $620,000 in October last year to $720,500 this October
•Waikato with a 15.9% increase from $565,000 in October last year to $655,000 this October •Canterbury with a 9.7% increase from $465,000 in October last year to $510,000 this October.

Bindi Norwell, Chief Executive at REINZ says: “October 2020 will go down in ‘housing history’ as being the point in time when Auckland region’s median house price hit the million-dollar mark for the first time–something no one anticipated or expected just six months after the entire country came out of lockdown. With Auckland City ($1,200,000), Manukau City ($1,001,000–a new record)
and North Shore City ($1,150,000) all having median house prices in excess of $1 million it’s not surprising that the Auckland region hit the million-dollar mark.

“While this is a significant milestone, it raises serious questions around future affordability for Auckland residents wanting to get a foot on the property ladder. It also highlights just how important it is that legislation, such as the RMA, is re-addressed quickly by the current government so it is fit for purpose to help support more houses being built at speed and at scale,” says Norwell.

“In addition to Auckland, 9 other regions and 28 districts saw house prices reach new record medians in October showing how low interest and mortgage rates, the diversion of spend on overseas travel to property, expats returning home, the removal of LVRsand a fiercely competitive marketdue to the lack of listings has been contributing to price rises over the past few months,” she continues.

“While every region in the country saw price rises, regions of particular note included Manawatu/Wanganui which had a record median price of $470,000 and 5 districts with record medians; Waikato with a record median price of $655,000 and 4 districts with record medians and Wellington with a record median price of $785,000 and 6 districts with record medians. Also, Rotorua District ($580,000), Tauranga City ($810,000), Lower Hutt ($761,000) and South Taranaki ($345,034) have had record median prices for 3 months in a row now and Christchurch City ($526,000) has had a record median for 2 months in a row.

“Given the price rises we’ve seen over the past few months, we wouldn’t be surprised if the Reserve Bank goes ahead with its proposal to reinstateLVRsbefore the 12-month period is up –particularly for investors,” points out Norwell.

Highest number of properties sold in NZ in 53 months

The number of residential properties sold in Octoberacross New Zealand increased by 25.0% from the same time last year (from 7,063to 8,830) – the highest number of properties sold in 53 months (May2016) and the highest October sales count since October 2006 (14 years).

For New Zealand excluding Auckland, the number of properties sold increased by 14.2% when compared to the same time last year (from 4,982to 5,690) – the highest number of properties sold since March 2017 (43 months) and the highest October sales volumes since October 2006 (14 years).

REINZ House Price Index (HPI) reaches another new high

The REINZ House Price Index for New Zealand, which measures the changing value of property in the market,increased 13.5% year-on-year to 3,248 a new high on the index. The increase in the REINZ HPI further demonstrates that intense competition for properties due to the lack of supply is putting pressure on prices.The HPI for New Zealand excluding Auckland showed house price values increased 12.0% from October 2019 to 3,203 a new high. Auckland’s house price values increased 15.4% year-on-year to 3,304 also a new high on the index and the largest percentage increase we’ve seen for the region in53months(May 2016).In October, Gisborne/Hawke’s Bay again had the highest annual growth rate in house prices values with a 17.1% increase to a new record index level of 3,488.

Again, in second place was Wellington with an annual growth rate of 16.7% to a new record index level of 3,331 and in third place was Auckland with a 15.4% annual increase in house price values –the first time Auckland has made the top 3 list in 59months(November2015). For two monthsin a row now, the REINZ HPI has shown no negative movements in any region’s house price value, showing the underlying strength in all parts of the country.