House Prices

House prices hit new highs

A huge demand for houses during March has pushed the median price across the country to $826,300 – a new record high and a $46,300 jump since last month.

Thursday, April 15th 2021

The median price rose 24.3% from $665,000 in March last year, the latest REINZ data shows. 

The soaring demand was despite reintroduced loan-to-value ratios kicking in with a 40% deposit now required by investors.

Most of the houses sold were before the Government took aim at investors extending the bright-line test to 10 years and scrapping mortgage interest tax deductibility.

REINZ acting chief executive Wendy Alexander says the big increase in the median price shows just how much pressure has been placed on the market. And believes it shows that the country desperately needs more supply to come to market.

Median house prices outside Auckland were also at record highs, reaching $680,000. This represents an increase of 23.6% from $550,000 in March last year.

Auckland’s median house price increased by 18.5% from $945,000 in March last year to $1,120,000 in March this year – a new record for the city.

In addition to Auckland, the following 11 other regions reached record median prices. 

Northland: with a 26.8% increase from $560,000 in March 2020 to $710,000 in March 2021. Additionally, Whangārei ($723,000) reached a new record median price.
Waikato: with a 22.7% increase from $595,000 in March 2020 to $730,000 in March 2021. Additionally, Hamilton City ($780,000), Hauraki District ($590,000), Matamata/Piako District ($680,000), Waikato District ($720,000) and Waipā District ($801,000) all reached record median highs.
Gisborne: with a 56.9% increase from $401,618 in March 2020 to $630,000 in March 2021.
Hawke’s Bay: with a 30.5% increase from $545,000 in March 2020 to $711,000 in March 2021.
Manawatū/Whanganui: with a 31.9% increase from $430,000 in March 2020 to $567,000 in March 2021 – the ninth record median price in a row. Additionally, Horowhenua District ($575,000), Manawatū District ($565,000), Rangitīkei District ($440,000) and Whanganui District ($521,000) all reached record median highs.
Tasman: with a 19.6% increase from $670,000 in March 2020 to $801,000 in March 2021.
Marlborough: with a 27.7% increase from $520,000 in March 2020 to $664,000 in March 2021.
West Coast: with a 36.4% increase from $220,000 in March 2020 to $300,000 in March 2021 – the second record median price in a row. Additionally, Grey District ($289,250) and Westland District ($405,000) were record median highs.
Canterbury: with a 17.8% increase from $488,000 in March 2020 to $575,000 in March 2021. Additionally, Christchurch City ($600,000), Tīmaru District ($430,000) and Waimakariri District ($565,000) all reached record median highs in March.
Otago: with a 30.8% increase from $535,000 in March 2020 to $700,000 in March 2021. Additionally, Central Otago District ($770,000), Clutha District ($400,000), Dunedin City ($650,000) and Queenstown-Lakes District ($1,185,000) all reach record median highs.
Southland: with a 12.2% increase from $370,000 in March 2020 to $415,000 in March 2021. Additionally, Invercargill District reached a record median high of $430,000.

The Manawatū/Whanganui region has now had nine record median prices in a row, 10 of the last 12 months were record or equal record prices for the Waikato region. Seven of the last eight months were records for the Canterbury region and Auckland has hit another record median price.

“These sorts of price rises are unsustainable and show just why New Zealand continues to top the league tables of most unaffordable nations in international studies,” says Alexander.

She also expects over the next couple of months house prices will continue rising, but she hopes it will be at a slower pace than over the past six to 12 months.

“The reimplementation of the LVRs, changes in government policy and the move towards winter should slow the rate of growth down a little.”

Houses sold at their fastest pace ever in a March month. And there have also been the highest percentage of auctions the country has ever seen.

The number of residential properties sold in March increased by 31.2% when compared to the same time last year (from 7,408 to 9,721) – the highest for the month of March in 14 years and the highest annual percentage change in three months. Some 2,313 more properties were sold when compared to March 2020 – an additional 75 properties per day.

The West Coast has had five months in a row of sales volumes in excess of 40%. The last two months alone have seen an 80% increase and in March it was a 120% hike. Alexander says interest in the region is strong because it is affordable and sales volumes are expected to continue at a strong pace for a few more months yet.

Four regions saw annual decreases in sales volumes, they were:

• Marlborough: -24.7% (from 97 to 73 – 24 fewer properties) – the lowest for the month of March in 10 years
• Tasman: -11.5% (from 78 to 69 – nine fewer properties)
• Gisborne: -8.9% (from 45 to 41 – four fewer properties) – the lowest for the month of March in seven years
• Otago: -1.3% (from 372 to 367 – five fewer properties).

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