Otago median house price soars 58%

Photo: Getty Images
Photo: Getty Images
Otago’s median house price has rocketed by 58.8% in the year to April 2021.

Figures out today from the Real Estate Institute of New Zealand (REINZ) show the median house price in the South Island region increased from $447,000 last year to $710,000.

Additionally, Dunedin City ($621,120) and Queenstown-Lakes District ($1,200,000) both reached a record median high.

Excluding April 2020, Otago had the lowest April sales volumes since April 2008.

However nationally, April saw the highest number of residential properties across New Zealand sold in an April month for five  years with just over 7000 properties.

Just over 4500 of those properties were outside of Auckland.

National prices up 19.1% in the year to April.

REINZ’s acting chief executive Wendy Alexander said sales volume comparisons on a raw data perspective were not able to be made with April 2020 due to the Covid-19 Alert Level 4 lockdown.

"While the national picture represents the busiest April in five years, the reality is that we’ve seen the number of sales decrease when compared to March.

‘‘While in part this is what we expect to happen when moving from March to April, there is definitely a wait and see approach from a number of investors and also some first-time buyers," she said.

riley.kennedy@odt.co.nz

Comments

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Shear madness. As a home buyer, I am now officially depressed.. The only winners here are banks and real estate agents. Please, bring on the next already overdue crash..

Agreed, I used to think that the exorbitant amounts people paid for rent could have serviced a mortgage but now I'm not so sure.

And speculators who already own 30% of available housing. They are the principle cause of inequality in New Zealand.

Omg
Real estate agents are just doing a job
Change the record

Banks or the real estate agents are little to blame. The real reason is the quantitative easing i.e., money printing by the govt and the low interest rates by the reserve bank. When you make it cheap to borrow money, people with equities will of course borrow the money to buy assets - which in NZ means only one thing, houses. Add to that the chronic shortage of houses, very few new houses built, and "nine years of negligence". On a fresh mortgage, your repayment on a $700k house at 2.3% interest rate is the same as a $500k house at 5%. And ultimately everyone wants to buy in a rising market. If the prices start to fall, both investors and the first home buyers will back off.

Could they break down the Otago sales a bit more? 58% is a very surprising figure given that places in Otago that were still relatively affordable were not very sought after nor big enough to push the median that high.
Or are they talking about median *sale price* here? Is it partially explained by the fact that abnormally high number of more expensive properties were sold this particular year? (Which is not surprising at all given the state of tourism industry).

Relax folks. While Otago house values do inflate It's no way near 58%
It's median *sale price* change they talk about here, not median *value*. Open map on homes co nz and you'll see that places like Milton Balclutha etc. are as affordable as ever. Even as far as Alexandra it doesn't look much more expensive then I remember.
What most likely happened is the relatively large number of sales in expensive Lakes region which pumped the median sale pice (not value).
But agents like to create sense of panic and urgency, why wouldn't they

The government and the banks can act any day they want to. Certainly, the closing of the disparity between investors getting interest tax deductible and genuine home owners paying interest post tax is being acted on, to a degree.
But at a stroke they can make it so cannot get mortgage beyond one or two homes and a raft of rules they can make, if inclined to. It is nonsense and self-induced by the governments and banks.

So what do you want the Government to do? Capital gains tax? If people can afford to invest in a second home, they can afford to pay 39% on what they make. If I sold an investment property and made $500k and had to pay capital gains, that still beats taking a loss. Besides, when you 1st time home owners own your house and sell it, you will be paying capital gains the same as the investors. Be careful what you wish for - because once capital gains starts everybody will eventually be paying it.

First-home buyers and those selling the family home do not, and no matter what you think, will not ever have to pay CGT!

It’s just another manufacturers crisis by a government that likes to claim it responds well to a crisis.
Have you noticed how they always claim they are for the disadvantaged but the disadvantaged are worse off after each policy they put in place.
They are a “woke” government and “woke” always goes broke because they don’t understand what it actually took to make it work in the first place.
That’s socialism for you. All feeling and no positive results. Just more broke.

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