House prices are rising so quickly, even real estate agents are calling for calm.
Prices hit new records across most of the country in March, according to the latest figures from the Real Estate Institute of NZ (REINZ), which represents the industry.
The nationwide median price was $826,300, up a whopping 24.3 percent since March 2020 and $46,300 in a single month - more than a person on the minimum wage earns in a year.
Auckland's median went up 18.5 percent to $1.12 million. Other regions that hit new highs were Northland, Waikato, Gisborne, Hawke's Bay, Manawatu/Whanganui, Tasman, Marlborough, West Coast, Canterbury. Otago and Southland.
Narrowing it down further, the most expensive district remains Queenstown-Lakes, with a median price of $1.185 million, narrowly ahead of Auckland.
"The Manawatu/Wanganui region has now had 9 record median prices in a row, 10 of the last 12 months were record or equal record prices for the Waikato region, seven of the last eight months were records for the Canterbury region and the Auckland region has hit another record median price," said REINZ acting chief executive Wendy Alexander.
"These sorts of price rises are unsustainable and show just why New Zealand continues to top the league tables of most unaffordable nations in international studies."
The most recent report from Demographia said Auckland had the fastest-deteriorating housing market in the world in terms of affordability, with prices more than 10 times household incomes and rising faster than in any other major city in the world.
"Additionally, we're seeing houses sell at their fastest pace in a March month ever and we've seen the highest percentage of auctions the country has ever seen since REINZ began keeping records, showing just how quickly the market is moving," said Alexander.
More than 9720 properties were sold in March - up 31.2 percent on March 2020, a "sizeable" increase even taking into account six days of March 2020 were lost to the COVID-19 lockdown. REINZ said this was surprising since new loan-to-value restrictions [LVRS] came in on March 1, 2021.
"We would have expected sales volumes to slow a little as buyers took this into account, however, it might just be that we need a few more months for this to really start to take effect," said Alexander.
More than a third of homes were sold by auction, a new record. Reserve Bank Governor Adrian Orr in February said auctions tend to drive prices up because buyers suffer 'FOMO' - fear of missing out - and act irrationally.
More than half of properties sold in Gisborne in March went under the hammer, so it's not surprising it also had the biggest increase in the median in the past year - up 56.9 percent to $630,000.
Only 15.3 percent of properties sold for less than $500,000 - down from 28 percent a year ago. Houses that cost $1 million or more now make up more than a third of the market. Both are records - the former a low, the latter a high.
The Government in March made moves to tackle the crisis, mostly focused on the demand side - cracking down on what it calls "loopholes" landlords and speculators have access to that owner-occupiers don't. The same restrictions won't be applied to new builds, in an attempt to encourage investors away from existing homes, reducing competition.
There is anecdotal evidence the measures might be working, as far as discouraging spending on existing dwellings - agents reporting fewer investors showing up to open homes and auctions, and a survey this week showing plummeting interest in property investment.
Whether that translates into prices stabilising or coming down remains to be seen.
"Looking forward over the next couple of months, we would expect house prices to continue rising, but we hope this will be at a slower pace than we've seen over the last six to 12 months," said Alexander.
"Hopefully the re-implementation of the LVRs, changes in Government policy and the move towards winter will slow the rate of growth down a little, but only time will tell what effect they will have."
Median values nationwide
- Auckland: $1.12 million
- Northland: $710,000
- Waikato: $730,000
- Gisborne: $630,000
- Hawke's Bay: $711,000
- Manawatu/Wanganui: $567,000
- Tasman: $801,000
- Marlborough: $664,000
- West Coast: $300,000
- Canterbury: $575,000
- Otago: $700,000
- Southland: $415,000
- New Zealand: $826,300