Median house price in NZ hits record high in November

Source: 1News

Median prices for residential property across the country and house prices outside of Auckland hit new record highs in November, the Real Estate Institute of New Zealand says.

Residential property median prices increased 23.8 per cent compared to November last year — from $747,000 to $925,000.

Median prices had effectively seen an increase of 3.7 per cent month-on-month, REINZ said.

Meanwhile, the median house price rose by 26 per cent — from $615,000 to $775,000.

In Auckland, the median price hit $1.3 million, another record.

REINZ chief executive Jen Baird reflected this meant the market had "settled back into its stride" and was returning to "near-usual" business.

"November shows an active market where property prices continue to increase, stimulated by demand as New Zealand prepared to leave alert levels behind."

Baird said the market remained "highly competitive", with a record median sale price, increased sales volume and median days to sell of 29 being seen.

REINZ's house price index also showed house values had reached new highs, increasing 27.2 per cent annually to 4281.

A for sale sing outside a house.

"This is now the sixteenth consecutive month we have seen a new high," its November report showed.

However, as REINZ noted in its December real estate survey with economist Tony Alexander, buyer demand is down and fear of missing out has dissipated.

This is because investors are less willing to sell and first home buyers are struggling to get money from the banks.

Banks have been applying debt to income ratios and assessing expenses "more deeply" in order to meet requirements of the Credit Contracts and Consumer Finance Act, the survey noted.

In order to meet new LVR requirements, the survey said banks are also trying to temporarily stop low deposit lending other than for new builds.

"It will ease up in a few months time, but for the moment, young people in particular just can’t get money out of a bank," Alexander told Breakfast.

"We’ve seen FOMO (fear of missing out) go back to where it was at the start of lockdown last year and even an increase in something I call FOOP — fear of overpaying. Some more people are worried they’re going to pay too much and prices could fall a little bit."

He said the buying sight unseen "frenzy" had also "definitely pulled back".

The survey said fewer people had been showing up to auctions and open homes.