The housing market continues to heat up, with new CoreLogic figures showing nationwide property values jumped 2.1 percent in November - the strongest monthly growth since 2004.
The CoreLogic House Price Index data released on Tuesday shows the average value of a property in New Zealand is now $769,013, with growth of 9.2 percent over the last 12 months.
The nationwide increase has been fuelled by accelerated rates of growth across urban, provincial and rural areas.
In the main centres, after a period of no growth during the COVID-19 lockdown and subsequent uncertainty, Dunedin "roared back into action with 3.1 percent growth" in November. The average value of a property there now is $505,461, higher than the $504,952 in Christchurch.
Wellington saw its property value grow 2.9 percent - likely a result of a lack of listings in the capital city - while Auckland had 2.1 percent growth. The average value in the City of Sails is now $1,038,477.
Over the last three months, Wellington was the best performing main centre with 5.8 percent growth, while Christchurch was the weakest with growth of just 2.3 percent over the period.
After months of "diminishing values", CoreLogic reports that Queenstown has seen 5.5 percent growth over the last three months. Other provincial areas have seen strong growth, including Gisborne where property values are 14.6 percent higher than what they were in August.
"First home buyers have taken up a record share of sales so far in quarter four, with 32 percent of sales to this group, no doubt helped by the availability of credit," CoreLogic says.
"There has also been strong investor appeal throughout 2020 in our easternmost city, with a regular share of 30 percent of sales going to mortgaged investors. With forestry and agriculture underpinning the local economy, Gisborne's property market is thriving, as these industries are not as impacted by the COVID-19 pandemic."
Property prices have been a hot topic recently, with several organisations now reporting the average price of a house in Auckland passing over the $1 million mark. The acceleration has largely been put down to a mixture of a lack of supply in the market, Kiwis returning to New Zealand from abroad due to the COVID-19 pandemic, and record-low interest rates.
Last week, Finance Minister Grant Robertson wrote to the Reserve Bank Governor about changing its remit to include consideration of house prices, something Adrian Orr says the bank already considers when formulating monetary policy.
The Reserve Bank has also confirmed it will bring back loan-to-value ratios (LVR) early next year, meaning banks would once again require a deposit of 30 percent from investors to get a mortgage and 20 percent from home occupiers.
CoreLogic said this is "unlikely to curb growth too much".
"The 70 percent LVR requirement for investors will take a section of buyers out who have recently been enjoying the relaxed settings, but while the lift in borrowing to this group increased significantly, their overall lending share remains small compared to the other groups.
"The concern in the short term is whether foreshadowing the reintroduction encourages investors to ‘get in while they still can’, thus creating some urgency, bringing forward demand and pushing prices up faster."
The property analysis group says supply will remain "constrained" for the rest of the year, with people moving their minds to the holidays.
"Given that first home buyers don’t have anything to list and that investors aren’t generally selling before making their next purchase either, the fact that these are the most active buyer groups at present doesn’t bode well for listings either.
"Meanwhile demand for mortgages, as measured by valuations ordered through the banks, is remaining strong and this is unlikely to change throughout summer, aside from the usual holiday lull. So expect values to remain pressured, and the Government likewise."