Otago median house prices at record high

A boardwalk stretching from St Clair in the foreground to Lawyers Head is the most popular...
The median house price in Dunedin saw an annual increase of 11.4% to $519,000. PHOTO: GERARD O’BRIEN
National and Otago house prices are at an all-time record due partly to the pandemic as sales rally post-lockdown and people upgrade their homes where they're spending more time.

Last month's new national record median of $675,000 is up from $580,000 a year ago and July's $659,000, according to new Real Estate Institute data.

Key data points for the Otago Region include:

  • 17.2% increase in median house price from $495,000 in Aug 2019 to a record high of $580,000 in Aug 2020.
  • House sales decreased by 2.9% from 339 to 329 sales from Aug 2019 to Aug 2020.
  • The number of days to sell a house increased by two days, from 30 days in Aug 2019 to 32 days in Aug 2020.
  • A REINZ House Price Index level of 3078. This means the value of the region's house market has increased by more than 300% since 2003. However, the region experienced a 1.3% decrease in the month-on-month value of the housing market.
  • Top sale for the region was in Queenstown Lakes District at $7.77m.

Bindi Norwell, REINZ chief executive, said many factors were working together to drive up prices but she cited the pandemic for two reasons.

"The combination of low interest rates, the removal of loan-to-value restrictions, the lack of listings, people's aspiration to have more space or a bigger backyard, catch up post lockdown and first-time buyers' desire to get onto the market have all contributed to the uplift."

Every region in the country recorded an annual increase in median house prices last month.

REINZ Regional Commentator for Dunedin Liz Nidd said the median house price in Dunedin saw an annual increase of 11.4% to $519,000.

"However, sales fell 14.5% year-on-year and days to sell increased by 6 from 21 days in August 2019 to 27 days in August 2020.

"New listings dropped as we headed into August but there have been similar numbers at open homes which continue to be busy."

The market ahead is expected to remain busy with increased buyer demand, she said.

REINZ Regional Director for Queenstown Lakes Gail Hudson said there had been an increase in enquiries coming from outside of the district.

"Particularly from Southland, Dunedin, Christchurch and Auckland.

"It appears many people are either wanting a second home for holiday use or to live in at a later stage. Buyer inquiry is not showing any signs of slowing down at present."

Queenstown Lakes median sale price was down 4.1% but there was a 22.9% increase in sales volumes when compared to the same time last year, she said.

Prices in the Wanaka area increased 4.4% and sales volumes increasing 68.4% year-on-year.

Economists were this year predicting house price falls of 6 to 9 per cent either by the end of this year or by March next year.

The opposite has happened and Norwell predicted this could continue.

"Unless we see more listings come to the market before Christmas, we may start to see additional pressure on house prices and affordability," she said.

The weather now has a big effect on the market.

"It will be interesting to see what happens now that we're heading into spring, as traditionally sales volumes start to lift as the weather warms up," Norwell said.

"As we've already seen, 2020 seems to be defying all predictions and going against all norms at this point in time. However, the full impact of Covid-19 may not have been realised yet, particularly in relation to unemployment and the economy."

Auckland's median jumped 16 per cent to $950,000 - a new record high - up from $819,000 at the same time last year and up from $918,097 in July.

Northland recorded a 16.6 per cent annual price rise to a median $590,000, up from $506,000.

Whangarei district hit a median price of $610,000 and Bay of Plenty prices rose 11 per cent annually to a new median $665,000.

Waikato prices jumped 16.7 per cent to $628,000, up from $538,000 at the same time last year, and the fourth record median price in a row.

Three Waikato region districts had record medians: Matamata-Piako District ($587,000), Otorohanga District ($418,500) and Waipa District ($715,000).

Manawatu/Wanganui showed a 15.1 per cent price increase to $450,000 up from $391,000 at the same time last year.

Three Manawatu/Wanganui district regions had record median prices: Tararua ($320,000), Manawatu ($535,000) and Whanganui ($375,000).

Taranaki prices were up 15.3 per cent from $391,000 to $451,000.

Canterbury prices rose 13 per cent from $440,000 to $497,000 and two districts within that region set new records - Ashburton at $391,500 and Waimakariri at $515,000.

Otago had a 17.2 per cent increase from $495,000 to $580,000 and Southland prices rose 20.3 per cent from $310,000 to $373,000.

Auctions were used in 16.1 per cent of sales throughout New Zealand in August, when 1232 properties sold, up from 10.6 per cent at the same time last year, when 650 properties were sold via auction.

This was the highest percentage of auctions for August in four years.

 - Otago Daily Times and NZ Herald

Comments

High house prices is a disaster. It means unaffordable housing for our kids. This is the boomer legacy, for which they will never be forgiven.

But with a recession, stagnant wages and job loses, this ultimately spells more long-term dept and despair for home buyers really. NZ's household debt to income ratio has hit nearly 170 per cent, a level UBS analysts have called "extremely elevated" and "one of the highest in the world".

The problem too, is that the banks are riding the property boom with nothing to replace it!

And of course real estate agents. Maybe now is the time to sell privately, therefore avoiding agents fees.

drivesouth-pow-classic-2.png

 

Advertisement

postanote_header_620_x_80.png

postanote_620_x_25.jpg

ev-and-hybrid-banner-updated_0.jpg

Our journalists are your neighbours

We are the South's eyes and ears in crucial council meetings, at court hearings, on the sidelines of sporting events and on the frontline of breaking news.

As our region faces uncharted waters in the wake of a global pandemic, Otago Daily Times continues to bring you local stories that matter.

We employ local journalists and photographers to tell your stories, as other outlets cut local coverage in favour of stories told out of Auckland, Wellington and Christchurch.

You can help us continue to bring you local news you can trust by becoming a supporter.

Become a Supporter