12 Aug 2021

Still booming: 'House prices have continued to rise across the country'

12:25 pm on 12 August 2021

House prices across the country continue to rise, with the median house price, excluding Auckland reaching a new record.

no caption

Photo: 123rf.com

The Real Estate Institute's House Price Index, which measures the changing value of property in the market, rose 30.6 percent in the year ended July compared with an annual rate of 29.8 in June.

The national median price rose a seasonally adjusted 2.4 percent from June, and up 25.1 percent on July last year, to $826,000.

The median house price excluding Auckland increased 23.3 percent from July last year to a new record of $687,500.

"House prices have continued to rise across the country as every region saw a year-on-year increase from July 2020," REINZ chief executive Jen Baird said.

"The last two months have shown early indications that the rate of growth is starting to ease, however, it is too early to say whether this is the usual winter easing we would normally see or if the government's intervention in the market and signalled changes to the OCR are starting to take effect."

Auckland reached a record median price in July, increasing 27.7 percent year-on-year, to $1,175,000.

Three other regions also hit record median prices.

In Canterbury, median prices rose by a 24.7 percent year-on-year, to $595,000. Manawatū/Whanganui increased 29.7 percent to a record equal $580,000. Southland was up 17.3 percent from July 2020 to $420,000, which equalled its record.

The average number of days taken to sell a property was 31, three days less than the same month last year.

The number of houses sold was down 5.3 percent on the month before from 7589 to 7187.

"July saw an easing in the number of properties sold across New Zealand, with an 11.7 percent decrease compared to July 2020 - although still showing strong numbers for a winter month with the number of properties sold in July 2021 higher than in 2019, 2018 and 2017.

"It is important to note that July 2020 was a particularly strong month as the country came out of Covid-19 lockdowns and completed delayed sales, so sales volumes were stronger than an average July," Baird said.

With the decrease in the number of sales, there may be signs that buyers are being impacted by the return of LVR restrictions and talk of interest rates rises.

"We need a few more months of data before we can see the impact of these changes and whether or not they are a long-term trend," Baird said.

The availability of property continues to put a constraint on activity, with a record low level of inventory.

"It is this time of year that people start to prepare their property for the usual increase in spring sales activity. On the ground, there are signs of more listing activity including from people who will take possession of a newly built home - a result of the record levels of consents granted over the last year.

"Played out, this will hopefully mean that we will start to see stock levels increase soon, delivering more choice into the market," she said.

Canterbury, Nelson, Northland, Southland, Taranaki and the West Coast all experienced their lowest levels of inventory last month.

Get the RNZ app

for ad-free news and current affairs