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Photo: RNZ / Nate McKinnon
In addition to Auckland nine other regions saw record median prices for October. Photo: RNZ / Nate McKinnon

House prices have increased 19.8 percent year-on-year with the median now at $725,000.

The Real Estate Institute's (REINZ) House Price Index, which measures the changing value of property in the market also hit a new high, gaining 13.5 percent to 3248.

Auckland's median house price hit the $1 million mark for the first time, up from $860,000 in October 2019.

REINZ chief executive Bindi Norwell said October 2020 would go down in "housing history".

"As being the point in time when Auckland region's median house price hit the million-dollar mark... something no one anticipated or expected just six months after the entire country came out of lockdown."

"While this is a significant milestone, it raises serious questions around future affordability for Auckland residents wanting to get a foot on the property ladder. It also highlights just how important it is that legislation, such as the RMA [Resource Management Act], is re-addressed quickly by the current government so it is fit for purpose to help support more houses being built at speed and at scale."

In addition to Auckland nine other regions saw record median prices for October.

They were Gisborne, Marlborough, Otago, Wellington, Manawatu/Whanganui, Northland, Bay of Plenty, Waikato and Canterbury.

Norwell said the re-introduction of loan-to-value (LVR) restrictions as signalled yesterday by the Reserve Bank would be highly likely.

"Given the price rises we've seen over the past few months, we wouldn't be surprised if the Reserve Bank goes ahead with its proposal to reinstate LVRs before the 12-month period is up - particularly for investors."

As well as record prices, the amount of properties sold during October skyrocketed to the largest amount since May 2016 and the largest amount for an October month since 2006.

"New Zealand's housing market is extremely buoyant at the moment, with more than 8800 properties sold around the country - that's more than 283 properties sold every day in October.

"This is just not what anyone expected to happen and shows just how much people's concern around future price rises is adding to their determination to buy now before prices potentially rise even further."

Inventory levels remained well down year-on-year but did rise month-on-month for the first time in five months.

"There is some relief in sight as inventory levels have lifted 3.2 percent since last month."

Comments

Low interest rates juicing the market. Shame it now takes a young graduate 14 years gross wages (or approx. 20 years after taxes) to buy an average NZ house. Debt slavery has never been worse in history. Great for the third of kiwis that own a house outright.

So much for our "transformational" government.

It's not the government that is the problem, it's the sheer greed of well advised opportunisitic investors, leveraging one property onto the next to feather their nests.. Never mind interest rates and LVR restrictions, target the investors. That is where the taxes need to be placed. The longer so called 'property investors' are permitted to function unchecked, the longer we shall see continued unabated house price increases. The so called investors are playing financial games with the future of first home buyers. For years property investment companies have schooled individuals in the art of leveraged properties. The reserve bank have done NOTHING to close a well advertised 20 year loop hole in the financial system. Property investors are falsely and shamelessly 'hydraulicing' New Zealands housing values. It's time to severe the head of the snake for the sake of our future home owners. Society is a shallow nothing without a place to call home. Wake up NZ.

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