House prices haven’t dropped yet – new records set

Median house prices across the country, excluding Auckland, rose 33.5% from $517,000 in April last year to $690,000, a new record high.

Auckland prices shot up by 21.6% from $925,000 in April 2020 to $1,125,000 in April 2021 – another new record.

In Auckland’s suburbs Manukau City reached a new record median of $1,070,000 and Franklin District reached a record median of $838,000.

The latest Real Estate Institute (REINZ) data shows across the country as a whole, median prices increased by 19.1% to $810,000 in the year to April.

This was down on last month’s record. While nine from 16 regions reached record median prices as did 21 districts – these figures are well down on 32 districts reaching record highs last month.

The House Price Index, measuring the changing value of property in the market, rose 26.8% year-on-year to 3,775, the highest annual percentage increase since records began.

It is the eleventh consecutive month it has risen to new highs. 

REINZ acting chief executive Wendy Alexander says some regions are starting to show signs of prices easing.

And the rate of growth slowing might also be the first signs that the reintroduction of LVRs is starting to have the desired effect.

Properties sold

The number of properties sold last month was the highest in an April month for five years. More than 7,000 properties changed hands. 

Stand-out regions included the West Coast where 46 properties sold – the strongest sales volumes for an April month in 15 years, Canterbury with 1,076 properties sold – the busiest April month in 14 years and Waikato with 700 properties sold – the busiest April in five years.

Excluding April last year when the country was in Covid-19 lockdown, Otago had the lowest April sales volumes since April 2008.

Gisborne had the quietest April month in seven years and Manawatū/Whanganui had the slowest April in six years.

Alexander says while the national picture represents the busiest April in five years, the reality is the number of sales dropped when compared to March.

“While in part this is what is expected 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 says.

“Some of these falls in sales volumes are likely to be early signs of the LVRs slowing the market, some will be attributed to the Government’s planned changes to tax deductibility and the bright-line test and some are likely to be the fact there was the lowest level of inventory for an April month since records began.”

Strength of rises

However, Alexander says there was surprise at the strength of rises in places such as Gisborne, Manawatū/Whanganui, Marlborough and Otago where there have been annual price rises in excess of 45%.

“It was also a surprise Auckland region reached another record median price – the third in a row, as have Tauranga City at four in a row and Manukau City, three in a row.”

Other regions reached record median prices:

• Waikato: with a 37.7% increase from $530,000 in April 2020 to $730,000 in April 2021. Also reaching record median highs were Hauraki District ($610,000), Taupō District ($700,000), Thames Coromandel District ($950,000) and Waipā District ($860,000), the third month in a row it has reached a record.
• Gisborne: with a 72.5% increase from $400,000 in April 2020 to $690,000 in April 2021, the third month in a row this region has reached a record. 
• Hawke’s Bay: with a 17.6% increase from $655,000 in April 2020 to $770,500 in April 2021. Napier City also reached a new record high of $810,000.
• Manawatū/Whanganui: with a 46.8% increase from $395,000 in April 2020 to $580,000 in April 2021 – the tenth record median price in a row. Manawatū District ($623,250) and Rangitīkei District ($451,250) reached record median highs.
• Taranaki: with a 42.1% increase from $380,000 in April 2020 to $540,000 in April 2021. New Plymouth District saw a new record median of $620,000 – the sixth in a row.
• Nelson: with a 15.1% increase from $645,500 in April 2020 to $743,000 in April 2021.
• Marlborough: with a 46.1% increase from $460,000 in April 2020 to $672,000 in April 2021, the third month in a row it has reached a record median price.
• Otago: with a 58.8% increase from $447,000 in April 2020 to $710,000 in April 2021. Additionally, Dunedin City ($621,120) and Queenstown-Lakes District ($1,200,000) reached record median highs for the second month is a row. 

Alexander says the ongoing lack of supply continues to put upwards pressure on house prices.

“As the country heads further into the cooler months of the year and the second tranche of LVRs comes into effect, we expect further stabilisation of the market in the coming months – as long as there is a solid level of new listings coming to the market.”

The median number of days to sell a property dropped by five from 34 to 29 when compared to April last year – the lowest since records began.

Nine regions across the country had a median number of days to sell of less than 30. This is a first for an April month since records began. Properties in Taranaki and Southland took only 22 days to sell – the fastest in the country.

Nearly a third of all homes sold by auction – the highest number of auctions for an April month.

For the first time in 14 months, Auckland had the highest percentage of auctions across the country with 48.1% (1,246) properties sold under the hammer – the highest percentage of auctions for an April month ever.

Price brackets

The number of homes sold for less than $500,000 across the country fell from 30.4% of the market (422 properties) in April 2020 to 15.6% of the market (1,124 properties) in April 2021.

The number of properties sold in the $500,000 to $750,000 bracket fell from 28.1% (390 properties) to 27.5% (1,984 properties).

At the top end of the market, the percentage of properties sold for $1 million or more increased from 21.5% (298 properties) in April 2020 to 33.7% (2,431 properties) in April 2021.