House prices in Wairoa, Hawkes Bay grew at the fastest rate in New Zealand during 2020 with a whopping 63.5 percent increase in median prices.
According to the latest analysis by Real Estate Institute of New Zealand (REINZ) median house prices in Wairoa leapt from $165,000 in 2019 to $269,750 in 2020.
Wairoa was the only district in the country that saw median prices increase more than 40 percent.
The second largest increase was seen in Kaikoura where prices jumped by 38 percent from $395,000 in 2019 to $545,000 in 2020, followed closely by Waitomo which saw a 35.3 percent increase from $225,000 in 2019 to $305,500 in 2020.
Chief executive at REINZ Bindi Norwell says Wairoa's hike in prices is unusual to see in such a small amount of time.
"An increase of $104,750 in 12 months," she says.
"This is the sort of growth levels we would expect to see over a number of years, not just a number of months."
Norwell says an interesting finding in the analysis was that there were no cities in the top 10 fastest growing regions.
"All of them were in smaller regional areas rather than in the big cities showing just how much pressure we’ve seen on house prices in the regions. It wasn't until we got to number 22 on the list that we saw a district in a major city represented."
She says the rate at which house prices are increasing has put "significant pressure" on people looking to buy a home, pushing locals in towns like Wairoa out of the market.
"The big questions most people are now asking are how much higher can prices go and how long will the rise last for," Norwell says.
"The reality is, that unless we can address the supply issues, we're likely to see house prices rise in the short to medium term."
Looking at the major centres, Auckland City topped the list with a price leap of 20.9 percent, followed by Lower Hutt with 18.9 percent, and Dunedin City with 18.8percent.
Auckland City saw median house prices topple over into the one million mark, going from $951,000 in 2019 to $1,150,000, the city taking out the title of New Zealand's most expensive region.
Opotiki District saw the lowest increase in prices at 0.4 percent, with 2020's median house price sitting at $373,500.
New Zealand as a whole recorded an 11 percent increase in house prices over 2020 with some Westpac economists predicting a 15 percent increase for 2021.
Economist Tony Alexander told the Am Show on Tuesday that house prices will continue to rise strongly into 2021 but expects the return of loan-to-value ratio restrictions (LVRs) to impact the market.
"After the next two months, when I think there is still some frenzy left in it, we are going to see a slow down in the rate of price gain. There's a lot of things that are driving people into a frenzy at the moment, a bit of FOMO (fear of missing out), a lot of people are looking to beat the return of the LVRs, the higher minimum deposits."
According to Alexander, a drop in house prices is "pretty rare."