13 Jan 2022

National average house price went up nearly 30% in 2021

5:14 am on 13 January 2022

The national average house price rose nearly 30 percent last year. Figures from QV show the average house price went up 28.2 percent in 2021, with the new national average hitting $1,053,315.

Christchurch based housing

Houses in Christchurch, which saw the strongest growth Photo: RNZ / Nate McKinnon

Christchurch saw the strongest growth. The city's average price rose 40.2 percent. The average price is now $785,000. In January 2021 the average price was $560,000.

QV operations manager Paul McCorry said he did not expect prices to keep rising so much.

"It's a huge, a huge increase for a year. Still a very good supply of homes in Christchurch, and probably in the wider Canterbury area, I don't think it's sustainable into 2022 at that level, so we would expect that to reduce."

McCorry said historically low interest rates were driving the growth, and with the Official Cash Rate possibly rising again next year that may not continue.

"There was a point at the beginning of the year where you had a two-year rate that was dipping below 2 percent. That meant money was very, very cheap, so what seemed like a big mortgage might have had a reasonably affordable repayment.

"I think as we head into 2022, that's where things are probably going to change a little bit. We've had inflation rate of 4.9 percent now, projected to be over 5 percent in the next two quarters. That's going to put a little bit of extra pressure on the Reserve Bank, when it comes to reviewing the OCR. Chances are it's probably going to increase again."

He believed the story of 2022 would be cooling market growth, with growth in the single digits and levelling off at the start of winter.

"You might see a little bit of increases here and there a little bit of decreases here and there, but nothing sustained. I think it's going to be more of a steady year rather than the astronomical year of 2021."

Get the RNZ app

for ad-free news and current affairs